Recently Congress passed legislation to create a new fund for $30 billion to assit 8,000 community banks in creating business loans. Specfically the bill, known as the Recovery Act Queue" will waive SBA loan fees, allow the SBA to guarantee larger loans and offer tap breaks for those businesses. While this is a good step in the direction of opening up credit markets for small- and medium-sized businesses, it is just a band aid. Unfortunately, these businesses will still have to go through the traditional banking system to access the funds. That means qualifying under very stringent guidelines, providing full documentation and if approved accessing the funds in 90 days or more. The more critical issue is fixing the credit markets!
Unfortunately the $30 billion does not place restrictions on business size that can utilize the funds. Most bankers are much more favorable to lending to large, established businesses rather than mom-and-pop operations. I have to believe that the $30B will quickly be gobbled up by established businesses retiring pervious expensive debt and leave little for Main Street. The banks will continue to lend to only their best clients and forget it if you have a credit score below 750!
Unfortunately the $30 billion does not place restrictions on business size that can utilize the funds. Most bankers are much more favorable to lending to large, established businesses rather than mom-and-pop operations. I have to believe that the $30B will quickly be gobbled up by established businesses retiring pervious expensive debt and leave little for Main Street. The banks will continue to lend to only their best clients and forget it if you have a credit score below 750!
The fundemental issues are still present and continuing to grow. In the MCA space we continue to see record submissions and funding amounts month-after-month. If you are an agent offering Merchant Cash Advance or any other type of alternative business financing, there has never been a better time. The demand is there, the funding companies left are all solid proven players and the range of MCA products continues to expand making it easier to get clients funding.
