Understandably, small business loan approval numbers have been complicated throughout 2020. But considering how many small businesses and small business owners need loan approvals due to the Coronavirus outbreak of 2019 and 2020, these numbers are quite scary. What can you do to protect yourself, and where else can you look if you need money?
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2020’s Loan Approval Numbers
Trying to get funding right now can be downright impossible from traditional lenders. Even the additional influx of money to the SBA and to banks is not enough to help make up their deficit. A recent study showed just little of the money is getting to those in need, and that many of the people who are going to get this second round of funding are holdovers from the first round. This could be brutal for many businesses that continue to change as the situation goes on.
“Applying too late” now means applying more than a few hours after the loan opens. This is true at every level, with loans and grants of all kinds being forced to cut off people who need them because there simply is not enough aide to go around. So, if you’re looking to keep your business stable throughout the rest of 2020 and if loan approval numbers continue like this… then what?
Alternative Lenders and You
This might be the time to turn to alternative lenders to grow your business. While these have the belief of being less reliable than traditional loans, they also can provide money that you need in places you haven’t thought to look. Alternative lenders range from online loan companies to crowdfunding and more. The important thing to know is that these loans are not going to be working with a bank as usual. You might need to consider your risk and the risk of the loans in order to stay smart.
Keep an eye on your credit score
Importantly, avoid merchant cash advances
Unless you are truly desperate, avoid merchant cash advances at all costs. These kinds of loans often are more dangerous than good, and they can really ruin your business’s credit. This might seem ideal in the short run, but it can cripple your business in the long run.
Let’s say things don’t get better anytime soon. We might be looking at low loan approval numbers for the rest of 2020, and possibly beyond. But by turning to alternative lenders and by thinking smart, you might save yourself a lot of struggles down the line.