For entrepreneurs like yourself, it may never seem like a good time to kick those small business plans into high gear. The market can be fickle no matter what industry you’re a part of, and there’s never a shortage of excuses to postpone that next critical move. Typically, you would have to find just the right balance between opportunity and your own need to take decisive action. But in the current business climate, you may be ideally suited to secure the funds you need to get your Limited Liability Company (LLC) (or other business structure) off to a tremendous start.
Money is always the biggest obstacle small businesses face, but recent studies indicate that the current strength of small business lending will only continue to trend upward in the years ahead. So if you’re in need of a small business loan, let’s look into why it’s a great time to seek out the startup funding you might need to get your new business venture off the ground as soon as possible.
Small Business Loan Approvals Are Up
According to the recent Biz2Credit Small Business Lending Index, the major banks (defined in this study as those with more than $10 billion of assets) are approving small business loans at record-breaking rates. The organization’s monthly report takes a close look at over 1,000 credit applications submitted to its online lending system by small businesses in all industries.
Overall, 2018 demonstrated tremendous growth in this area — November 2018 alone saw approval rates rise by one-tenth of a percentage from the previous month, reaching 26.9 percent. Although such an increase may not seem like it makes an astronomical difference, it's just the latest turn of events indicating the burgeoning willingness among the world’s biggest financial institutions to fund small businesses.
From regional to community banks, small business loan approvals were up across the board. Even so, approval rates were one-tenth of a percentage higher month-over-month at small banks, where more than half of applications were granted. This marks the highest rate in more than four years, and that total shows little sign of slowing down anytime soon.
Of course, despite the remarkable growth among different types of banks, not all news of the small business lending front is positive. But even these figures have held mostly steady. Approval rates among institutional lenders, alternative lenders and credit unions all fell one-tenth of a percent, to 64.7, 56.7 and 40.2 percent, respectively. Still, the impressively higher-than-normal totals bode well for the overall health of small business loans.
Historic Levels of Optimism
Armed with the latest numbers (and their analytical prowess), the National Federation of Independent Business has declared in their latest Small Business Optimism Index that optimism among small business owners has reached unprecedented new heights. Although it suffered a drop in late 2018, the current index value of 104.8 maintains an upward trend that goes back at least two years. This is due in part to the sustained approval rates mentioned above, but it also provides a good sense of the positive morale necessary to confidently move forward with your latest venture.
The slight decline that did occur is being attributed to expected business conditions and expected real sales, though sales were up and compensation likewise increased to match record highs dating back to the late 1980s. Overall, more business owners are on the lookout for more qualified workers and are steadily sharpening their plans to create even more jobs.
In many respects, it looks like small businesses are taking advantage of a mild down period to gear up for more growth to come — a prospect that is looking more and more likely with each additional bit of research that emerges. The percentage of business owners who were purchasing new equipment and/or making improvements to their facilities is either remaining stable or inching upward. As small business loans are delivered, we can expect to see the results of these purchases come to fruition.
Take Action Now
With market conditions currently so favorable for small businesses like yours, it goes without saying that the sooner you explore your lending options, the likelier you’ll be to secure all the small business funding you need to execute your business plan. At the moment, leveraging technological upgrades and changes to tax laws also support the notion that we’re living in a golden age of small business lending. Moreover, many banks offer additional benefits to businesses owned by women and minorities, providing an even better chance to get your loans met now.
At Incfile, we’re committed to helping your business make the most of the current landscape. We provide business owners with the tools to manage their companies and empower them with the resources to create a business that stands the test of time. So many businesses open each year, but those with an established game plan will stand the best chance of achieving longevity. To that end, we’re here to answer any questions you may have, ensuring that you have every opportunity to fine-tune your strategy. If you’re ready to find out how we can help, check out our website and get started today!
Robert Yaniz Jr.
Robert Yaniz Jr. has been a professional writer since 2004, including print and online publications. Much of his experience centers on the business world, including work for a major regional business newspaper and a global law firm