Regulatory Obstacles Still Impede Large Bank Lending

While big banks still hold a large amount of capital, they are slow to lend it.

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Nov 28, 2014, 05:05 ET

LOS ANGELES, Nov. 28, 2014 /PRNewswire/ -- When a series of loan defaults in 2007 and 2008 plunged much of the world into a financial crisis, many of the "too big to fail" financial giants, the same ones that supplied the individual and business loans our economy relied on, were forced to completely re-examine their lending practices. A flurry of regulation passed in the aftermath of the crisis has limited the bank's abilities to lend as they did before, but luckily for entrepreneurs in need of business loans, smaller more amenable lenders like Advantage Capital Business Loans (ACBL) are lending at a much higher rate.

In a recent interview with The Wall Street Journal, Ted Zoller, the director of the Center for Entrepreneurial Studies at the University of North Carolina in Chapel Hill, explained this phenomenon, saying, "It will take several years of stable economic conditions and strong business fundamentals for these banks to come back around to offer credit facilities for growing small businesses."

Due to these difficult lending conditions, many assume that bad credit business loans are simply out of reach. While that may be true for big banks, small banks and bridge lenders like ACBL look at much more than just credit history when approving loans. Underwriters at ACBL can take more time to review each application, and carefully comb over each business' financial records to determine whether their revenue stream can support repayment.

As Mr. Zoller explained, "small businesses are generally finding strong partners in regional banks who are familiar with the economic conditions on the ground and are prepared to share the risk with the business owners."

Advantage Capital Business Loans typically vary from $10,000 to $500,000, and are given to already established, yet growing businesses. Another unique aspect of the loans that differs from the big banks is the ability of businesses to pick their daily payment amount. While most big banks require a lump repayment sum at the beginning or end of the month, Advantage Capital Business Loans are repaid daily with automatic payments deducted from the business' bank account. This approach is one of the reasons why ACBL can approve more businesses. A daily repayment system minimizes the risk of default by incorporating the loan repayment into the margins of the business, and it provides convenience to the business owner who no longer has to worry about writing a large check at the end of each month.

While the future of big bank lending is unclear at best, companies like Advantage Capital Business Loans are working to bridge the gap in small business lending, providing easy business loans to companies that need them now. To inquire about your business' eligibility for an Advantage Capital Business Loan call (877) 379-0202, or visit them online at AdvantageCapitalBusinessLoans.com.

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