One of the big impediments many small business owners have seen when it comes to achieving their goals in the last few years is that the access they might have had to financing from lenders. Financial institutions have, perhaps understandably, kept purse strings tight over lingering fears of delinquency and default, but that problem persists for many small businesses to this day.
Fortunately, the federal government has taken note of this trend and tried to do more to help entrepreneurs gain access to credit when they might need it, according to a report from the Huffington Post written by Maria Contreras-Sweet, head of the U.S. Small Business Administration. As such, the SBA has taken steps to make sure that owners can have improved credit access in order to increase the strength of their companies when need be.
How is this being done?
The SBA’s new approach in terms of improving how much it extends to companies is varied, the report said. Late last year, for instance, it started using more predictive and (hopefully) accurate credit scoring models to assess the risk companies might have posed for them. That includes taking a closer look at the company’s credit, rather than the owner’s personal standing, as a result of the fact that many owners have gone into their own pockets over the years to keep their companies going when they come on hard times.
Moreover, the SBA also recently launched a program called LINC that is designed to help companies find lenders who are able to give them loans in terms they’re looking for, the report said. Based on a short questionnaire, information about a loan request is distributed to many financial institutions, which can then reply in as little as 48 hours.
The agency has also tried to make loans more affordable in new ways, the report said. That includes waiving fees for the vast majority of small business loans, with only those rising to more than $150,000 carrying any sort of additional charge.
All of this may be good news for entrepreneurs, and those who want to position their companies best when it comes to qualifying for such financing may want to think about the ways in which they can cut costs. That might include finding more affordable small business insurance policies, including those for commercial insurance, to potentially free up thousands annually to improve bottom lines.