Have You Received a Small Business Loan?

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Opinions about the economic recovery are divided.  Some believe that we are on the road to a fast and strong recovery, while others feel that it will take time and due to consumers’ learning how to save and bargain-shop, the economy will never really be the same.

According to an article titled, “Big Banks’ Small Business-Lending Promises,” which recently appeared in BusinessWeek, “…several of the nation’s largest lenders—including Wells Fargo, Bank of America and JPMorgan Chase —made big promises to expand small business lending in 2010.”

Based on the information presented in the article (writer, John Tozzi summarized the lending statuses of the banks listed above) it may be wise for small business owners to keep their minds open – in regards to bank loan alternatives.

Wells Fargo

2009: Lent $13 billion to small businesses.

2010: Set a goal to lend $16 billion to small businesses.

First Quarter:  Has extended $2.9 billion in new loans to small businesses so far.

Based on these numbers, Wells Fargo has only reached 18% of its lending goal for 2010, but we’ve already completed 33% of the year.  This means, in order to reach its $16 billion goal, the bank needs to lend more than $1.6 billion a month until the end of the year.  In fact, just to meet last years quota of $13 billion dollars, they would need to lend at an average of approximately $1.2 billion per month, which is still higher than the 725 million per month average that they have been lending this year.

Sure, the bank “hopes to reach its commitment” by the end of the year, but this based on an “anticipation of an improved economy.”  What if the economy does not improve as expected?  Should small business owners have to pay by forfeiting funds for their businesses?  Or should they look at other options such as the merchant cash advance, with which they can receive up to $500,000 in unsecured funds without having to meet stringent requirements?

*Have you been able to get a bank loan this year?

*Have you turned to a bank loan alternative instead?