Lending Options Opening Up for Small Businesses

Small business owners are usually very aware of the challenges of financing their enterprise, whether seeking funding for initial start-up, growth or new capital assets.

Fortunately, credit markets opened up a little more in 2013, as the economy continues slowly improving. The year saw an increase in the number of  small businesses applying for and receiving loans. Some financial experts and government officials say this is a sign of continued economic growth to come, which has led to a reduction in monetary stimulus by the Fed.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of financing to small companies, saw a 1% gain in November from the same period in 2012. Additionally, November had the highest per-day borrowing rate of 2013, even though it only had 20 working days in the month.

Historically, the PayNet scale has illustrated a strong correlation to overall economic growth. "It's another sign of continued expansion," says Bill Phelan, founder of PayNet. Small businesses "are seeing more demand for goods and services and that's all good for GDP." The good news is crucial, as the Federal Reserve weighs the economy's tolerance for cutbacks and begins to phase out Federal stimulus assistance.

Thus, while there is promising news for small businesses that are looking to grow in the new year, there is plenty of risk as well, making loan options, such as those offered by ACBL, more essential than ever. A

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