Most business owners know that after the 2008 recession, operating a business changed. The Dodd-Frank Wall Street Reform and Consumer Protection Act adopted on July 21, 2010, brought the most significant changes to financial regulation in the United States since the Great Depression.
Some argue that Dodd-Frank was insufficient to prevent another financial crisis, and other contend that it went too far and unduly restricted financial institutions.
Whatever the case we all know that qualifying for a bank loan became more and more difficult, regardless of whether you were an established business of ten or more years or a homeowner with an excellent credit rating.
In the following years, businesses compensated by keeping more cash on hand and not investing in opportunities that they may have taken advantage of before the recession.
One of the exceptions to the banking industry clamp down on money lending has been the government operated programs through the Small Business Administration (SBA).
The SBA offers programs to help small businesses develop business plans and provide other tools to help them become successful. In addition, they offer loan programs that help businesses grow.
There are critics that say the SBA only helps those businesses that don’t really need help, just like the banks. But there are also advocates who will tell you that if it were not for the SBA, they would not be in business today.
Earlier this month, the SBA of Nevada held a lunch to recognize small businesses that have found the SBA to be a friend.In Nevada alone, for the fiscal year 2015 which is from October 1, 2014, through September 31, 2015, the SBA helped to create or save 1,262 jobs, a 120 percent increase over the prior fiscal year.
Also, the SBA helped to start 574 businesses (a 19 percent Increase), served 6,759 clients (a 32 percent increase), and gave out 626 loans (a 47 per increase), equaling $232.5 million (a 32 percent increase in the amount of dollars).
While those numbers are impressive and contributed greatly to the economic comeback of Southern Nevada, there are still a number of small businesses that did not, or could not, take advantage of the SBA loan program.
One of the reasons that a business might not qualify for a loan is that your working capital ratio is not in line with what the bank prefers to see. One fix may be to reduce your Accounts Receivable and therefore put more cash into your reserve.
At Business Finance Corporation, we are here to help. Contact Dave Cabral or Albert DelGado at 702-947-3800
Your partner in Success