February 18, 2014
By Bob Coleman
Editor, Coleman Report
Writes our friend Ami in the Wall Street Journal, “A small percentage of small-business owners are bankable either with an SBA loan or a traditional bank loan. From the population of small-business owners that we work with at our loan brokerage, this group is about 15%. It seems to us, in our office, that these businesses are having an easier time getting these loans on the margin due to the fact that some businesses have taken giant leaps toward rebuilding success over the past year, and therefore become more profitable, rather than banks loosening up their criteria for lending.”
The 85% aren’t left out though. Ami notes the rise of alternative lenders to meet the need.
“In the wake of this environment, we’ve seen the rise of an alternative-lending industry with hundreds of players charging high rates and happy to lend to almost anybody, irrespective of credit. These lenders don’t report on their lending activity like the banks and SBA lenders do, which makes it even trickier to understand the state of small-business lending.
“It’s almost like the small-business lending world is bi-polar.”
Ladies and gentleman, whether you like it or not, our industry is undergoing radical change.
Only time will tell if the new higher rate, speed to market lending models are sustainable.