Small companies can still get credit. Of course this doesn’t come from the Small Business Administration or bank as a business loan anymore. Now many small companies use credit cards to help. There isn’t really very much funding available to anyone unless they have a Fortune 500 company these days.
Numerous more small company credit cards
Credit cards are what, according to CNN Money, small business owners are relying on to get credit. Companies are approved for credit cards as very easily as they are denied for business loans. Since 2008, the $ 40 billion in lending to small companies within the first quarter of 2010 was the lowest. Less than half of small companies looking for funding in 2009 were really able to secure a loan of any sort, and as of June of this year, the portion of the stimulus package that was dedicated to small company lending lapsed into oblivion.
What is within the way?
A small bank that gives out a loan is how small companies find a way to succeed. The Small business Administration is something that can help as well. The SBA stimulus is running dry and smaller banks do not have liquidity anymore. When small company owners are trying to get a loan, they have to put up some collateral, like property. Since property is not as valuable anymore, less credit is going to be made available. Credit cards then become the only source of credit accessible. Companies can’t free up cash with mortgage loan modification when the property doesn’t have anymore value.
Someone uses all the benefits
SBA installment loans have a seven year minimum. Credit cards will never be paid off when one starts making minimum payments and never quits. The difference between regular credit cards and business credit cards is that business credit cards aren’t under the CARD Act. Big banks are the source of funding for credit cards. Bank of America,JP Morgan Chase, Citibank and Wells Fargo all lend huge amounts of money on credit cards. Wait a moment; who was it that got one of the most bailout funds again?
Citations
CNN Money
cnn. com/2010/07/14/smallbusiness/bernanke_lending_credit_cards. fortune/
NY Times piece about SBA loans
boss. blogs. nytimes. com/2010/07/11/s-b-a-lending-plunged-in-june/
