Don't bank on the SBA for your loans right now
Can’t get a loan? No worries. At least the Small Business Administration is there to help … isn’t it?
Probably not. In recent months, more and more companies’ lending requests are being shot down by the SBA.
For Oct., overall SBA loan volumes were down 50% from Oct. 2007.
And this trend is expected to continue for a while. Critics feel the giant Congress bailout package will take even longer to trickle down to small businesses and provide relief.
The reasons for the decline are plenty: lower demand, increased lending standards and declining credit status of applicants. Lenders are also scaling back loans because of losses in their SBA portfolio and fear of a decrease in collateral value.
And most recently, lenders and banks have been unable to sell SBA-backed loans to other businesses on the secondary market.
So if you were counting on the SBA for funding, now may be the time to explore less-traditional loan options, including, private lenders, credit unions, microlenders and factoring.
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