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When SBA Lending Declines: What Every Small Business Owner Needs to Know.

Writer's picture: Yosmel GutierrezYosmel Gutierrez

If you don't have investors, venture capital, or wealthy friends backing you, now is the time to prepare. While No One can predict the future, those who learn from the past can stay ahead of the curve. Here's what the history and data tell us:




SBA loan approval rates for the last 8 years.

When SBA Lending Declines.

Banks take on more risk on their balance sheets since the government isn't guaranteeing the same amount of loans. This often leads to stricter lending criteria, particularly at large banks which currently serve over 60% of Small Businesses.


Profitability will Matter even more.

If your business is not profitable the chances of being approved for a loan are slim. But even if you are, sometimes when you don't have any collateral the loan can also be declined due to stricter underwriting guidelines and uncertainty in the market.


The Internet is convenient but Not Always Beneficial.

When big banks say No, many turn to online lenders. Some are legitimate, others are plain predatory offering high-interest loans that can trap you in a cycle of debt.


Meanwhile, Community Development Financial Institutions (CDFIs) and other community banks may be a good fit for their unique situation, but their limited budget and reach make them harder to find and this usually leads to less affordable and responsible lending options.





As a small business owner who may not have a financial network, navigating these options can feel overwhelming:

  • How do you find the right bankers?

  • How many calls before I get the right person?

  • How do you know if you're pre-qualified to work with them?

  • What information they will ask?


This process if often time-consuming, stressful, and discouraging, leaving many small businesses desperate. Unfortunately, desperation often leads to two costly decisions:


  • Draining personal finances; which weakens your financial security.

  • Take on high-interest cash advances; which can spiral out of control, resulting in legal judgments and liens against your business if repayment becomes unmanageable.


Actions taken in response to financial challenges


Our Solution: Diversify your Banking Relationships As Soon As Possible.


Small and Regional Banks often excel at lending, providing personalized service and a deeper understanding of your business needs. However, we know building these relationships takes time, effort, and resources.


That's why we've streamlined this process for small businesses in Southern California, and we're expanding nationwide soon. Our Strategic Banking Ally team connects you with Industry-tailored banks to maximize the ROI on your banking relationships.


Smart business owners hope for the Best but always prepare for the Worst.


Let us help you diversify your banking relationships and secure the financial future of your business. Book a consultation today


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