Fast Business Loans – Facts and Figures

As the economy has improved offering more jobs and opportunities to individuals, small businesses have reaped the benefits with greater access to fast business loans and working capital.  The outlook is positive and numbers showing increased funding and loans as well as borrowing on behalf of smaller companies.

Many start-ups who want to benefit from this positive trend may wonder, how can I grow my business and have more access to capital and fast business loans?  Below are some of the top questions (and answers) from that the Small Business Administration regarding small business loans and financing.

Are fast business loans available for small businesses? Is it better than it was five or six years ago at the start of the recession?

The SBA says that the “borrowing conditions” have been gradually improving.  Banks and other lending institutions have indeed eased on the rules for borrowing — allowing more small businesses to benefit from loans and credit.  Small business borrowing amounted to about $1 trillion in 2013—$585 billion in business loans outstanding, $422 billion in credit from finance companies, and the rest from a mix of sources. However, banks and traditional lending institutions don’t typically specialize in fast business loans and approvals can take months — if at all, so other lending companies may be a better option for businesses that need working capital fast.

How much money or capital do small businesses need to start up a business?

The problem with that question is that small businesses vary.  While some consulting and other services may have little overhead (a few computers and phones and possibly rent) versus a retail operation where the overhead is higher with larger rental space, inventory and more – it’s hard to say exactly.  According to the SBA, Wells Fargo did a survey and came up with $10,000 at the very least – but again, that depends on the nature of the business.  Another survey from Kaufman Firm Survey (which interviewed mostly high tech start-ups) said $80,000 – so it varies too widely to really offer one number given the wide range of industries that small businesses encompass.

That said, having a business plan that outlines what a company needs including hardware and software, rents, inventory, payroll and more will help the small business owner better understand what they need and in eventually procuring loans and other capital.

How do small businesses get financing – what means are they using? Loans?  Credit Cards?  Angel investors?

According to the SBA, the Kaufman Firm Survey showed that the most common source of funding is the small business owner’s own capital as well as monies from relatives.  The next source of funding usually comes from loans and credit cards – as a matter of fact the SBA says about 7% of all small businesses use credit cards to fund their first year.  The third largest source of capital came from “cash infusions” such as angel investors.  To learn more about the working capital loan approval process for a small business, contact one of our representatives today to understand your options and whether fast business loans are an option for your business.