Grow Lending, LLC

Grow Lending, LLC Grow Lending provides unsecured low rate business loans up to 5 year terms and $500,000 We seek clients and partners with the same philosophy.

Grow Lending provides unsecured low rate business loans up to 5 year terms and $500,000

We Are Client-Focused

Client-Focused means that Grow Lending will seek solutions that are specific to our client's needs, rather than fitting the client to a particular solution or simply running the client through a convenient process. We identify our client needs and opportunities, and then leverage our ex

perience, principles and extensive network of industry contacts to bridge a well-conceived outcome, constantly keeping our client's best interests paramount. Sophisticated-Approach

Grow Lending offers a high level of sophistication to both its middle-market clients and its principal operating partners. As business owners and operators, our understanding goes well beyond the basic financial parameters of the deal and allows Grow Lending to provide invaluable insight into positioning a company for the capital markets and assessing the interaction between a particular capital structure and a business's long term needs. Relationship Driven

Relationship Driven means Grow Lending places high value on relationships with clients, partners, capital sources and industry contacts. We view our client's success over the long-term, measured against other possible outcomes. We believe that it's those results that matter most.

Grow Lending Introduces the Guaranteed Asset Based Loan! Regardless of credit and income we will provide working capital...
05/13/2015

Grow Lending Introduces the Guaranteed Asset Based Loan! Regardless of credit and income we will provide working capital based on fixed asset current market value. We lend against just about anything you can think of; Jewelry, Loose Gems, Watches, Aircraft, Boats, Exotic and Classic Cars, Yellow Iron, Motorcycles and the list goes on....

No credit check
No income verification
Low rate
We will lend up to 60% of the current market value of the asset

Learn More visit www.growlending.com or call us (855) 515-Grow

Putting our money where your mouth is...Grow Lending needs your help! We will give $50.00 Visa Gift Card for the most cr...
04/10/2015

Putting our money where your mouth is...

Grow Lending needs your help! We will give $50.00 Visa Gift Card for the most creative 3 sentences on how to market this picture.

Keep them comments G rated and contest ends April 25, 2015..let the fun begin!

A Picture is Worth a Thousand Words..You can earn up to $1000 per funded referral by asking a business owner or friend i...
04/09/2015

A Picture is Worth a Thousand Words..

You can earn up to $1000 per funded referral by asking a business owner or friend if they need money to grow their business.

Learn more [email protected]

Taking on Debt to Grow Your BusinessStretching a company's working capital through various forms of debt can be the sour...
04/08/2015

Taking on Debt to Grow Your Business

Stretching a company's working capital through various forms of debt can be the source of just enough extra cash to fund revenue-generating marketing programs or help companies manage when customers don't pay bills on time.

The trick to securing debt is first exploring your funding options long before you can't make payroll. Your job is to learn what type of loan best matches your operations and customer activity. Here are a few choices to research:

SBA-backed loans
The Small Business Administration (SBA) operates several loan programs for startup and advanced-stage businesses. The first thing to know is that you don't usually apply directly to the SBA for a loan, but to a local bank that participates in the SBA loan program. Some of these loans provide long-term financing for ambitious real estate or manufacturing expansion programs, while others help business owners buy franchise outlets or start new businesses.

The SBA requires its partner lenders to adhere to strict underwriting guidelines, so it's not true that SBA-backed loans are easy money. The real advantage of the program benefits partner lenders the most. In addition to bringing in new business, lenders also have the added comfort of being able to turn to the federal government if the borrower doesn't repay the loan in full.

Most local SBA websites list partner lenders, which can include big banks and regional community banks. It's entirely possible to get a "no" from one partner SBA lender and an enthusiastic "yes" from another. Even though SBA administrators are not supposed to recommend one partner bank over another, I find that, when asked in person, they gently steer businesses toward lenders who are most active in a community. Check out www.sba.gov for helpful descriptions of SBA-backed loan programs.

Asset-based lenders (ABLs)
The range of ABLs -- financial service companies that offer asset-backed lending -- is much broader than most business owners realize. And that's good news for business owners who may be discouraged by big-bank lending decisions. Asset-based lenders typically advance funds against a company's accounts receivable, inventory or equipment.

Of course, some lenders are more aggressive than others and will offer lines of credit to younger companies or companies that have recently received a boost of equity from investors. The amount of funds that are advanced under ABLs is dependent on an agreed percentage of the value of the secured assets -- typically 70 percent to 80 percent of eligible receivables and 50 percent of finished inventory.

Notice the phrase "eligible receivables." Commercial lenders cherry-pick your customers, focusing on those that preferably pay in less than 60 days and have strong credit ratings. Sales to individuals or small companies may not be considered as "eligible" for loan advances. Interest rates vary according to the size of the line and financial position of the borrower.

Sometimes banks tack on additional "audit" or due diligence fees that increase the overall costs of borrowing through an ABL. Larger banks tend to ask for personal guarantees of company founders and require companies to transfer all other banking relationships over to the bank, too.

Factors
Factors are a close cousin to asset-based lenders in terms of providing extra working capital in exchange for a secured interest in a company's accounts receivable. With accounts receivable financing, the stability of a company's customer base is just as important as the creditworthiness of the borrower. It makes sense, too. Factors usually purchase eligible receivables directly from business owners and arrange to have customers submit payments directly to the factor through a "lockbox."

Today, factors provide financing in a broad range of industries, not just the garment trade, where they predominated in the U.S. up to World War II. Theirs is usually the first kind of funding companies can receive after emerging from a Chapter 11 bankruptcy filing. But don't be fooled by the way most factors quote their interest rates. A 1 percent per month interest rate is much more expensive than 1 percent per year.

Revenue-based financing
Revenue-based loans, or RBLs, are a relatively new kind of loan, well suited to growing companies that don't have a lot of hard assets to lend against. Typically, companies receive an advance of approximately 10 percent of their prior-year revenues. Lenders are paid back each month based on the company's monthly revenue results. So if revenues are growing, then payment to the RBL lender increases; if revenues are declining, payment is reduced.

Internet, film production and technology companies that receive monthly royalties from licensing deals are good candidates for RBLs. However, RBL lenders rarely work with companies with gross profit margins that fall below 50 percent, which is a high bar for young non-technology companies to achieve.

The cost of an RBL is not usually quoted in interest rate terms, though the effective cost of the capital arrangement typically exceeds 20 percent. Expect all revenue-based lenders to ask for some sort of "equity kicker" in your business in the form of a warrant or common stock.

Microloans
Microfinance companies, which now operate in all 50 states, offer small loans -- at rates that are usually below those of small-business credit cards -- mostly to first-time business owners, and even to entrepreneurs with a low personal credit score. Loans can range from $500 all the way up to $35,000. The average first microloan is approximately $2,000.

Microloans can be a great solution for many service-oriented startup entrepreneurs who need to buy office, computer, culinary, film production or other supplies to start a viable business. What I like best about the microfinance community is its eagerness to serve business owners in a friendly way. Many microfinance offices also provide helpful training programs on accounting, marketing and sales generation.

Here's a final tip for networking to sources of debt in your community. In addition to asking other business owners in your social network for referrals, talk to your local accountant -- business accountants see the paper trail of lending relationships in their client files.

Grow Lending offers many loans programs ranging from secured to unsecured with amounts beginning at $5,000 up to $3M

Consult with us and learn how, together, we can grow your business!

www.GrowLending.com

04/06/2015

We take a holistic approach to understanding small business creditworthiness. This means your interest rate will be determined based on a number of factors, from your real-time cash flow and credit scores to online customer reviews. Interest rates remain fixed over the life of a loan.

* Monthly Payments - no daily or weekly payment to contend with
* 1 to 5 Year Terms - not 3 to 6 months
* Reasonable Rates - not high factor rates like business or merchant cash advances
* No Prepayment Penalty - payoff at anytime without penalty
* Loan amounts up to $500,000

There are no secrets when it comes to Rates at Grow Lending!

Fixed Interest Rates Start at 5.99%, unsecured, no collateral required
Terms up to 5 years

If you need a business loan, Grow Lending is your choice for great terms!

www.GrowLending.com

6 Weird But Successful Small Business Ideashttp://www.moneycrashers.com/ author Heather LevinTough economic times can in...
03/30/2015

6 Weird But Successful Small Business Ideas

http://www.moneycrashers.com/ author Heather Levin

Tough economic times can inspire a lot of creativity when it comes to new business ideas. For example, though a recession was in full-swing, 2010 saw the highest rate of entrepreneurial activity in decades, according to the Kaufman Foundation.
But it seems counter-intuitive. After all, starting a new business is incredibly risky. According to the Small Business Administration (SBA), over 50% of small businesses fail within the first five years, and of those that make it, another 50% fail in the next few years.
Those aren’t good odds for anyone. But when times are bad, sometimes things can’t get much worse – especially for people who’ve lost their jobs and perhaps even their homes. So the prospect of starting a new business just isn’t as risky as it might otherwise be. Moreover, for many people, creating their own job becomes their only option.
Though, there are plenty of jobs that are considered “recession proof,” such as plumbers, morticians, accountants, and grocers, there are also plenty of weird and wacky new business ventures that have thrived in a down economy. These businesses might make your eyes widen with disbelief. I know mine sure did when I found out about them!
So what are some weird and wacky businesses people have started?
Weird & Wacky Small Business Ideas

1. Bed Bug Barrier
bed bug barrierIf you’ve ever been to a hostel or hotel infested with bed bugs, then you know how terrible those little mites can be.Well, Tony Abrams made a fortune by inventing barriers to keep the bedbugs from biting. His business, Bed Bug Barriers, creates and sells barriers that go underneath the legs of a bed. These barriers trap the bedbugs as they attempt to crawl into the bed to bite sleepers.
Think it’s crazy? He’s made millions with this idea.

2. Rent-A-Chicken
I know what you’re asking: why on earth would someone want to rent a chicken?
Well, some people who are interested in urban farming want to get chickens. However, that’s a big step. What if they don’t like caring for chickens? Then, they’re stuck with a coop and several chickens they don’t want.
This is where Rent-A-Chicken comes in. This husband and wife team in Traverse City, MI will bring you everything you need to care for a brood of hens for the summer. For $250, you can see whether or not you really want to try raising chickens on your own. In fact, there’s another business just like this in Australia called Rent-A-Chook.
Wacky? Yes. Useful? You bet.

3. Hangover Helpers
Here’s the situation: You and your friends were up all night partying. Now, you’re suffering from a horrendous hangover, you’re dehydrated, and your apartment is trashed. The thought of having to make yourself something to eat and then clean up that colossal mess is just too much to handle.
So what do you do? You call the Hangover Helpers. These two college guys in Boulder, CO help their hung over clients crawl back into the land of the living with as little pain as possible. The guys show up at your house armed with a breakfast burrito and Gatorade for you. They then clean every room where the party happened. This includes cleaning dishes, pots, and pans, and recycling all of your beer bottles.
Think this idea is too crazy to actually work? These guys have already been featured in Forbes Magazine, on CBS, and on the talk show, Regis and Kelly. They have enough business to keep them busy as long as they want.

4. The Smashing Place
Have you ever intentionally broken a plate? I’m talking about when you’re stressed or angry, and you just hurl the thing across the room and watch with a real sense of pleasure as it smashes against the wall. Feels pretty good, right? You might even feel the stress or anger leak right out of you.
Well, that’s the whole idea behind The Smashing Place. This business, located in Tokyo, allows clients to come in, buy a plate or a cup of their choice, and smash it against a concrete wall. They can swear, stomp their feet, or do anything else they want to relieve stress. I have a feeling a business like this would really take off in a place like New York.

5. I Do, Now I Don’t
When Josh Opperman’s fiancée left him after a three-month engagement, he was crushed. All she left him was the fancy engagement ring he’d worked so hard to save up for. However, when he took the ring back to the jeweler to return it, he got a nasty shock. They only offered him $3,500 for the ring he paid over $10,000 for. Yikes.
So he started I Do, Now I Don’t to get even. I Do, Now I Don’t is a website that allows people to sell their engagement rings (or any other fancy jewelry) to other users for way less than going to a jewelry store. Think of it as the Craigslist for fine jewelry.
The site has been an incredible success and has been featured on CNN, The Today Show, Fox News, and in The New York Times.

6. The Pet Loo
If you’ve ever had a pet while living in an apartment, then you know how painful it can be to take them out for potty when it’s 10 degrees with a fierce wind. Or maybe you work long hours and always have to rush home to let them out. Or maybe you’re a senior citizen and it’s hard to make multiple trips in and out of your home.
Well, all these reasons are why The Pet Loo was invented. The Pet Loo is a square of fake grass, which sits atop a simple waste containment system that you put inside your home or apartment. It’s just like a mini-backyard where your dog can relieve himself. Although The Pet Loo is based in Australia, similar businesses have sprung up here in the States. Good idea? No doubt.
In fact, people are putting their Pet Loos in their laundry rooms, their basements, on balconies, and even in their grass-less backyards.

We encourage small business and sometimes it is the out of the box thinkers that end up making a lot of money!

www.GrowLending.com

Is your business image...ugly?Meet Peanut, a two-year-old mutt who is the winner at the World's Ugliest Dog Contest at t...
03/23/2015

Is your business image...ugly?

Meet Peanut, a two-year-old mutt who is the winner at the World's Ugliest Dog Contest at the Sonoma-Marin Fair, June 20, 2014, in Petaluma, Calif.

Author: Grow Lending Staff Member
Photo: http://sanfrancisco.cbslocal.com/

Today, more than ever, image is everything to your client. I meet a lot of people at New York networking events who are really interested in learning more about what I do, but who aren't always sold on the whole "why I have to have a professional photograph" thing. "Amber, I already have a decent personal picture, so why would I need a new professional one?" So, I always take a few minutes to ask them the following 8 key questions:

1. Are they just hiring your service or are prospects hiring you?

When it comes down to it, there are a million other caterers, real estate agents, and graphic designers in the business. What will really separate you from the competition is a memorable face and personality to go with the name and profession. A boutique photo studio can provide just that.

2. Do you think your picture ‘looks the part’?

Who fits the role better, a chef in a t-shirt on the beach with his dog, or a chef in her whites behind a counter with a meal laid out on top?

When it comes down to first impressions, the RIGHT images - the ones that clearly communicate who you are as a person AND professional - are a MUST to have on your site or profile. If its something you dug out of your personal archives just to prove that you’re a real person, it’s not good enough.

3. Does your picture make me ‘know, like and trust’ you?

According to Caitlin Friel, a salesforce.com recruiter, "The portrait acts like an ice breaker". Humans are hard-wired to make snap judgments about new individuals based on nothing more than what they see before them. In fact, the power of first impressions is so strong that looks can often override facts. Your portrait has much more power than you think it does, and a good professional photographer knows how to capture that vital first impression in an evocative image.

4. Does your picture make you stand out in a sea of competition?

When everyone pretty much looks the same on paper, a great portrait can help set you apart and really get the right people to notice you (especially in New York!). In this regard, having a professional photographer create a signature portrait for you is like getting a tailor-made suit for an important upcoming interview. Potential employers and clients will make their way to your website and LinkedIn long before they ever see you in person. If you don’t do your due diligence, you might not get the job.

5. Are you staying current with your marketing collateral?

If the “you” that shows up to meetings and engagements no longer looks like the “you” in your portraits (you’re older, your hair has changed, your personal style is different, etc.), this will absolutely not result in a positive first impression. In fact, when the same thing happens in online dating, you can be sure there won’t be a second date.

6. Ever heard of the term “fast food quality”?

Because a fast food look won’t get you gourmet leads. One thing I always stress to potential clients is that portrait photography isn’t just a one-time purchase. Your image is an investment. Just like a tailored suit or a certification class. When you look the part and exude confidence, you are presenting much more than just your good side.

Not to mention your customers want a return on their investment. If it doesn’t look like you invest in yourself, why should they?

7. Would you hang it up on your walls?

When you finally have that perfect photo, you should be proud enough to hang it up in the office AND at home for years to come. A quality portrait taken by a professional photographer is more than just a business investment, it’s a legacy that can be passed down to future generations.

8. Does your picture make you feel confident?

Last question: Do you cringe when people look at your photos, or do you feel like a respected and sought-after expert? This might be the most important question of all.... If you don't feel confident about your public persona, how can anyone else.....

At the end of the day, the secret sauce to a successful public image is having a expert portrait photographer bring out a person's inner charisma.

www.GrowLending.com

4 Factors to Consider Before Taking Out a Small-Business Loanhttp://quickbooks.intuit.com/ by Rachel HartmanIf your comp...
03/23/2015

4 Factors to Consider Before Taking Out a Small-Business Loan

http://quickbooks.intuit.com/ by Rachel Hartman

If your company is running short on funds, applying for a loan may seem like the best next step. After all, an influx of cash can keep operations running, support expansion plans, and ultimately help to increase revenue.

Before borrowing money, however, it’s important to understand that you will be held accountable for repaying the loan, no matter what happens.

“In most cases, you will be required to sign personally,” notes Zalmi Duchman, founder and chairman of Fresh Diet, a meal-delivery service. “If the worst-case scenario occurs and you close down your business, you’ll be left on the hook for the balance.”

Follow these guidelines to make sure that you — and your small business — approach the application process fully prepared.

1. Know your credit score. If you’re applying for a loan with a traditional lender, your credit score is one of the main factors that will be considered. So, before you contact any bank, know your numbers. Request a personal credit report (get one for free at AnnualCreditReport.com). Check for errors, such as a payment you made on time but was reported as late. If you find a mistake, contact the credit bureau and company involved to resolve the issue.

If you have a high credit score (above 700), you stand the best chance of getting a loan with an attractive interest rate. In today’s market, for commercial loans under $100,000, you can expect to pay an average rate of 6.89 percent interest, according to the Small Business Rate Report by Bloomberg Businessweek released in December 2013. If you have a mid-level score (600 to 700), you may be able to secure a loan but at a higher interest rate. And if your score is low (below 600), you may find it difficult — but not necessarily impossible — to get approved for a loan.

2. Understand your options. Lenders vary from the traditional (banks and credit unions) to the nontraditional. One of the latter options is Grow Lending, a financial platform that extends loans to small businesses. While the interest rate you’ll get through Grow Lending will likely be considerably higher than the average rate today, you’ll also find the approval process to be much speedier than at a bank. In addition, you’ll start repaying the loan in small increments every day, thus reducing the risk of missing a bigger monthly payment that might come with a traditional loan. Another alternative is a merchant cash advance, which is based on future credit card sales. While you can expect higher interest rates and fees with this option, there are several perks to consider. It’s easier to get approved for a merchant cash advance, even if you have a poor credit rating. Once approved, you’ll receive funds quickly, and the repayment plan is based on your revenue.

3. Know what you need. If you’re not sure how much cash your company needs to operate or expand, meet with an adviser or an accountant before approaching any lenders. Be prepared to supply documentation to back up your request and to answer lenders’ questions about your finances, business model, and future plans. Also be ready to discuss exactly how the loan will be used. For instance, you might show how the cash will be used to purchase materials, to set up a new location, or to pay additional staff.

4. Recognize the process. Even if you don’t get the first loan you apply for, there may be some lessons to gain from the experience. Let’s say you were turned down due to poor credit. You could take time to improve your credit score and then seek a loan at a later date.

After initially being denied a large SBA loan in 2007, Duchman wrote a personal letter to the vice president of the bank. In the letter, he explained why he believed the bank should give him the loan. As a result, his request was granted. “The loan helped me make my first acquisition that catapulted my small business,” Duchman notes.

Let Grow Lending provide the necessary working capital needed to take help your business grow!

www.GrowLending.com

The Fastest-Growing Industries in Americawww.business.time.com author: Christopher Matthews The past ten years haven’t b...
03/20/2015

The Fastest-Growing Industries in America

www.business.time.com author: Christopher Matthews

The past ten years haven’t been the healthiest for the U.S. economy, to put it lightly. The decade began inauspiciously with the bursting of the dot-com bubble and ended in a financial crisis and a tepid recovery. But the suffering wasn’t evenly distributed. In fact many industries were created during this period, and others found their stride. The market research outfit IBISWorld released a report this month ranking the fastest growing industries over the past ten years, along with its predictions of where these industries will stand five years from now. Some sectors are more obvious than others, (we all know healthcare is a growing segment of the economy) but many are less than obvious. So if you’re looking for a little good news in these economically uncertain times, we present the 10 most turbo-charged sectors of the U.S. economy.

Cosmetic Procedures
By Sophia Yan

The job market may be sagging, but why should your face? Minimally invasive cosmetic procedures — Botox, chemical peels and fillers — were 73 percent more popular in the final quarter of 2008 than in 2007, according to a survey conducted by the American Society of Plastic Surgeons. "People are saying that they're not going to buy the 'it' purse, but the last thing they're going to give up is the stuff that makes them look good everyday," says dermatologic surgeon Dr. Tina Alster of the Washington Institute of Dermatologic Laser Surgery.

Such cosmetic treatments, while not inexpensive, typically cost no more than a new suit. But elaborate procedures that require patients to go under the knife — liposuction, breast augmentation, nose jobs — are becoming less popular. Alster calls these the "big-ticket items," running to the thousands of dollars. That definitely exceeds most recession budgets.

Herbal Meds

Losing a job often means losing health care. But Americans are still trying to stay healthy, self-medicating with vitamins and herbal supplements, according to a government survey released last month. Such alternative meds are popular, in part, because they are usually cheaper than prescriptions medications. But there's also a cultural shift at work. "The [American] mindset has become more about staying fit," says Joe Fortunato, CEO of nutritional-supplement retailer GNC. "We exercise; we eat right; we take supplements. It's all a regimen that [customers] believe in," he says.

And it's not just your everyday vitamins that are selling well. Shoppers are looking for what Fortunato calls "specialty items" — higher grade fish oils, fiber supplements, multivitamins and cleansing products, also known as laxatives. Overall, the $21 billion the herbal supplement industry shows no signs of decline in this recession.

Microbreweries

The obsession with artisanal food is reaching drink, too. Craft brewers are enjoying boom times, with retail sales up by 11 percent in the first half of 2008, while import beer sales are down for the first time last year since 1991. "There's a general consumer trend of people more interested in buying locally," says Paul Gatza, director of the Brewers Association.

Sales at Delaware's Dogfish Head Brewery grew over 40 percent just last year and the forecast is strong for 2009 — January revenues are up 45 percent, according to Adam Lambert, vice president of sales.

Gatza predicts that craft breweries will grow anywhere between 4 to 6 percent in the next year. "Beer is recession resistant," he says.

Candy

Chocoholics continue to seek their sweet fix — sales at the Hershey Company and the UK's Cadbury are positive, even robust. Hershey reported fourth quarter earnings that were 9.3% higher than year-earlier levels. Cadbury, based in Britain, said it expects to report "strong profit growth for 2008"

Although sales are also going well at higher-end chocolate makers like Lindt & Sprüngli, they are seeing slower growth. Consumers are trading down from premium, luxury chocolates to more affordable treats. One concern for all chocolate makers is a recent spike in cocoa prices, which could crimp margins in the year ahead.

Exotic Travel

Exotic travel is a comfy business to be in these days. Travel to the Middle East and Africa was up 11 and 5 percent in 2008, respectively, but travel to more traditional vacation or business destinations, Europe and Asia, declined 3 percent in the second half of the year, according to the United Nations World Tourism Organization.

South Africa is an increasingly popular destination, with pristine beaches, bargain wine and safaris on the menu. "The American supply of tourists seems to be holding its own," says Paul Gardiner, the international marketing director for Mantis Collection, a group of luxury game reserves and hotels in South Africa. Gardiner calls South Africa "the flavor of the month" because "It's one of the cheapest destinations in the world right now." As it stands, the exchange rate is about 10 South African rand to one U.S. dollar. Toss back a beer for just 4 rand, or about 40 cents here.

Grow Lending can help your business become a Fast Growing Business with one of our many financing and loan options!

www.GrowLending.com

Good News and Bad News on Small Business Lending in 2014www.clevelandfed.org Author Ann Marie WierschLast year brought b...
03/19/2015

Good News and Bad News on Small Business Lending in 2014

www.clevelandfed.org Author Ann Marie Wiersch

Last year brought better news for U.S. small businesses. Reports indicate that, in the aggregate, the financial condition of small businesses has improved, and the lending environment has become friendlier to small firms seeking credit. In turn, lending is on the rise.

But if the news is better, then the apt question is, "Better than what?" Certainly, the upbeat tone of data released in recent months indicates that trends are moving in the right direction. At the same time, some of that progress represents just a fraction of the ground lost during the recession.

While large business loans have soared to record levels, small business lending is losing ground
Using bank loans under $1 million as a proxy for small business lending, we can estimate the impact of the recession on small business credit. Figure 1 charts bank lending to businesses during the past 10 years. The data show that the volume of small loans, those under $1 million, dropped significantly between 2008 and 2012, and has barely recovered. Small business loans now stand 17 percent below the peak reached prior to the recession. While small commercial and industrial loans grew 3.4 percent over the past year, this modest improvement does not provide strong assurances about the health of lending in this space. In contrast, lending to larger businesses (loans greater than $1 million) bounced back quickly and loans outstanding are now more than 24 percent higher than pre-recession levels.
Many small businesses are still recovering from the recession and demand for loans is tepid
The decline in small loan origination's appears to be a result of several factors. Data provide evidence that through the recession and the post-recession period, the supply of credit was limited and demand for credit weakened. (For more detail, see "Why Small Business Lending Isn’t What It Used to Be.") Though supply-side constraints appear to be easing, demand for credit remains somewhat soft. Two surveys of small business owners – the monthly National Federation of Independent Businesses (NFIB) survey and the quarterly Wells Fargo/Gallup survey— provide perspective on why this might be the case.

Both surveys show that optimism among small business owners has made gains in the past few years, but has not yet reached levels observed between late 2005 and early 2007. The NFIB Optimism index stood at 100.7 in October of 2006, fell to 81 in March 2009, and now stands at 96.1. In a similar display of strengthening but still tenuous optimism, the Wells Fargo/Gallup Small Business Index reached a high of 114 in late 2006, and sank to a low of -28 in 2010. As shown in Figure 2, the most recent reading was 58.

Relatedly, the financial condition of small firms has improved in recent years, but again, the improvement does not make up for all the ground lost during the recession. The most recent Wells Fargo/Gallup survey reveals that 60 percent of respondents describe their financial situation as "very good" or "somewhat good." This is a marked improvement from the 48 percent who said so in early 2010, but the newest reading still falls short of the 72 percent who responded positively in late 2007. Responses on business owners’ cash flow rating follow a similar pattern. Most recently, 55 percent of respondents described their cash flow as "very good" or "somewhat good," up from 36 percent in 2010 but below the 62 percent level reached in the fourth quarter of 2007.

On other measures of financial strength, both surveys indicate that small businesses are faring somewhat better. The latest NFIB survey shows, for example, that the net percentage of businesses reporting higher sales in the prior three months is negative three (-3), indicating that a slightly higher share of businesses saw their sales decline than those that saw them increase (see Figure 3). This is an improvement over the negative 34 (-34) reading from mid-2009, but not yet in line with the positive reading of +11 from mid-2006. Similarly, the Wells Fargo/Gallup survey finds increases in recent and expected future revenues, but in neither case have the measures reached pre-recession highs.
Both surveys reveal weaker demand for credit. Back in early 2007, nearly 40 percent of respondents to the NFIB survey reported they were regular borrowers--that is, they borrowed at least once every 3 months. In October of 2014, only 28 percent said they were. On capital spending, the current NFIB and Wells Fargo/Gallup surveys show similar patterns: higher levels of both recent and planned capital spending, albeit at levels below pre-recession benchmarks.

On the supply side, bank lending standards give us insights on loan availability. The most recent Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) shows small business loan standards are easing. This iteration of the survey asks questions about standards for small business credit relative to the prior decade. More banks reported that standards are tighter now compared to the midpoint of the range of standards over the past decade. Banks reported higher standards for collateral, which could be problematic for those businesses that have not seen a full recovery in real estate values.

A healthy small business sector is important to economic growth
New and small firms serve an important function in our economy. Small businesses account for nearly half of private sector output and employment in the U.S. In addition, small firms – led by new small firms – have posted the highest net job creation rates going back to the 1970s. Coming out of the most recent recession, however, job creation by small businesses has lagged, and the new business formation rate continues to fall. While it is not clear that these trends are driven by weaker borrowing or limited access to loans, it is evident that businesses need adequate credit to succeed and grow. As such, policy makers should not lose sight of the trends related to small business credit, even with the recent positive reports showing improvements.

Grow Lending believes in the success of Small Businesses and offers Unsecured Long Term Loans. Let's see how we can grow, together!

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