The credit crunch brought on by a worldwide economic crisis is felt more so by small businesses than others. Businesses need a working capital for it to survive and for it to flourish; there should be enough cash flow to support upgrades. Because of the economic crisis, banks have trouble lending even though the company asking for the loan is in good standing with them. Since banks are being conservative due to the economic instability, most small businesses go to the next available option just to survive: Micro lenders.
When the American Recovery and Reinvestment Act were signed into a law on February 2009, the Small Business Administration (SBA) is given the ability to distribute funds amounting to $56.1 million to various microloans to help sustain the small business market. Microloans are also great especially if you are just starting your own business from scratch and you have no business credit history yet. If you will ask a loan from banks and you are under the low-income bracket or without any credit history, there is a very slim chance for you to be able to get the loan unlike with the microloan program.
Even during dismal times such as these, you still have the opportunity to make your small business thrive. Financial support is available as long as you know which one is right for you and which is suitable given the present economic situation.
No comments:
Post a Comment