It has long been acknowledged that small businesses are one of the primary drivers of economic growth in the U.S., and that for many such companies to succeed they need reliable access to credit from lenders. However, it seems that in the latter situation, there really hasn’t been much of that in the last few years, and some experts wonder whether expanded credit availability could help these firms drive more improvement nationwide.
The improved economy over the last several years has put many small business owners nationwide in a position to see their companies succeed and grow, but many often feel as though they can’t accomplish that alone, according to a report from the Lancaster Eagle-Gazette. Consequently, many experts are now calling for banks to loosen their purse strings when it comes to extending credit to these companies so that they can buy equipment, improve cash flow, and potentially hire more workers. Some are now rising to the challenge.
“We have a lot of different options on the loan side,” Jeff Beard, president of a small Pennsylvania bank chain that’s looking to improve credit access for small business clients, told the newspaper. “If a business is looking for a piece of equipment, we can certainly do a loan based on that. We could do lines of credit so if they have some cash flow needs throughout the year, they could have a line of credit where they could tap that to get the cash they need. Typically, that’s secured by accounts receivable and other assets that the business may have.”
What obstacles remain?
However, there remains some concerns among lenders – particularly larger, national ones – that may still be at least somewhat concerned with credit risk for these companies. More small businesses are failing than being created these days, and some may believe that the economy has not yet improved to the point at which it would be prudent to start giving out credit at anything resembling pre-recession rates once again.
Owners who want to put their companies in the best position possible to obtain credit from lenders when they need it may want to consider the benefits of tightening up their bottom lines. That could include taking the time to find more affordable small business insurance policies, including those for liability insurance, to potentially save thousands of dollars each year.