Small businesses are reporting an improvement in new employee hiring, marking the highest jump in 8 years. This is a sign that the United States economy is improving. This is also a positive sign for potential business owners, as well as a positive sign for those looking for small business loans.
According to Entrepreneur Magazine, there are between 25 and 27 million small business employees in the United States. That accounts for around 60% of all employment. Small businesses help keep our country afloat, not only job-wise, but also economy-wise. Small business can help keep locals shopping within small towns, and help keep a variety of business in larger towns. However, nearly 10 percent of small businesses reported laying off an average of 1.8 workers, and the remaining 76 percent of small business owners made no net change in employment. Even with the majority of the small business universe stagnate on hiring, it is still a great time to jump into your own business.
However, getting a small business loan, even in a growing economy, can be tricky. There are many options for funding your new company, and it can be hard to tell which the best is for you and your business. Bank loans are an option, though many banks offer “cookie cutter” financing options, as well as rigid policies regarding your business. If you have a unique business, or are an e-merchant, this might not be your best option. Private lenders are old standards, however you need sufficient collateral tied to real estate. However, private loans do offer the benefit of not having to deal with rigid policies as a bank loan would. The Small Business Administration is a newer method of obtaining a loan. With the Small Business Jobs Act upping the guaranty against default to 90% and raising the maximum loan amount to $5 million, the 7(a) loan was revamped to make banks want to lend to small businesses, and to entice small business owners to actually apply for the loan.
While each avenue of funding is well established and beneficial to small business owners, be sure to consider and compare every method before choosing. While one method is great for the business down the block, it might not be the best bet for you and your business.
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