Tag Archive for 'Small Business Loan'

SBA Poll: We don’t want no shtinking loan!

The Question:
What is your recent experience with getting a bank loan for your business?

24% - I have applied for and received a business loan recently.

18% - I tried to get a business loan from a bank but was turned down.

27% - I don’t think my business could qualify for a bank loan.

30% - Economic and/or political uncertainty makes me reluctant to borrow right now.

My Comments:
The best source of capital for a small business is from profits left in the business. But since most small businesses can’t generate enough profits to grow very fast, the actual primary source of growth capital for a small business is a bank loan.

In our online poll last week we wanted an update on where our small business audience is with regard to borrowing money, so we asked that question. More than three-fourths either don’t want to borrow money from a bank, can’t or don’t think they can.

Small businesses create over half of the U.S. economy. If three out of four small businesses aren’t borrowing money, that explains a lot about why U.S. GDP is stuck at below 2% annualized, doesn’t it? So which comes first, the loan or the growth? Historically, entrepreneurs will borrow money to take advantage of growth opportunities they believe are possible. So, the loan comes first, then the growth.

Four years after the end of the Great Recession, the U.S. economy should be growing at over 3%. Instead it’s slouching along at less than 2%. If three fourths of the sector that produces over half of U.S. G.D.P. is not a candidate for a bank loan, that does not portend a rosy outlook for the economy.

The economy will pick up when small businesses start borrowing money again.

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