According to a USA Today, “these are the good old days for America’s small business owners.” At the moment, this is definitely true for New York. For the small business owner of New York, now is the time to borrow.
It has been six months since the Federal Reserve instituted an interest hike – the very first in nearly a decade. Early in June, experts shared that business owners shouldn’t be surprised if another increase took place at the Federal Open Market Committee Meeting from June 14th to 15th. While this date has come and gone and the interest rate remained steady, there have been signals that a hike could still come this fall.
Why is this good news for the small business owner? If the interest rates do increase again, it’s not necessarily a bad thing. The lenders in many financial institutions – yes, even the big banks – will be more willing to grant loan requests. Why? They will see a higher return on investment from borrowers. This is evident in the New York metro area where, even in the face of hiked interest rates, small business loan approval rates are still consistently higher than the U.S. average.
According to NY Daily News, “Lending approval rates at big banks in April 2016 approved 23.3% of funding requests from small business owners, a number that has been gradually improving over the last 12 months.”
Financial firms investing in technology have been credited with helping to streamline the process and increasing efficiency in granting loans, with both quicker turnarounds and lower default rates. For example, in May, Wells Fargo launched an online loan offering program for smaller loan investments. These smaller investments of $10,000 to $35,000 provide business owners with their advancements within days. While tech-savvy Millennials are helping to revolutionize small business lending, business owners of all ages are playing their part as well. The increasing use of tablets and smart phones by business owners for business-related tasks is helping to push these changes along.
Online lenders have continued to prove themselves to be a competitive force in the industry. The changes taking place in small business banking benefit both the lender and the borrower; the borrower benefits from competitive pricing and cash availability, while lenders make deals at reduced acquisition costs. Ultimately, the advantage of working with an alternative lender as a small business continues to be their efficiency, convenience and speed.
When working with First American Merchant, small business owners can quickly secure a business loan through a simple, fast and hassle-free application process. Any questions business owners may have can be answered by our team of experts. To learn more about our process and business funding options, contact us today!