How Alternative Lenders are Repairing the Cracks of 2008

Written by: Steve Cook   Sun, February 17, 2013 Commentary

Prior to the housing market crash of 2008, small businesses thrived and profits were easier to come by. However, when the bubble burst not only did homeowners find themselves in a bind, small businesses began to suffer. Ironically, when small businesses relied on a stable economy that rested on the housing market, the world of real estate now relies on small businesses to be prosperous in order to resurrect the glory years from the past. Nowadays, business owners have to take out loans to stay afloat but the big banks are closing their doors. The curtains have not dropped entirely. A business line of credit can be easily obtained though an alternative lender to save small businesses thus stimulating the economy. These institutions are truly playing a vital role in today’s market, and any player in real estate should be made aware of their importance on the economic stage.

Big banks look the other way

Do your own research and you will see that thousands of small businesses have been shunned by big banks when seeking a business loan. However, alternative lenders approved them and kept them running strong. If someone has less than perfect credit, big banks wont touch them. Considering that these institutions are largely responsible for the housing market crash, one would think they would lighten restrictions in order to help stimulate the economy. But alternative lenders have stepped in, and are doing a phenomenal job.

Policies that help

Alternative lenders are great fits for business loans sought by small companies that suffered from credit damage. There are several reasons why their policies make it possible for businesses to continue to thrive. Here are a few of them:
· No collateral required
· Bad credit or no credit is not a disqualifier
· Flexibility to use funds as desired
· Loan granted in 24-48 hours
· Line of credit used at borrower’s discretion and timing
The relaxed and lenient policies that alternative lending institutions practice upon are placed for the simple point of helping to keep small businesses up and running when large banks refuse to offer assistance.

The nature of most business loans

When one conjures an image in their head of a business loan, one often thinks of tens upon thousands of dollars passing hands. But the truth of the matter is that most business loans are made up of small amounts of cash and are just enough to save a business from failing. In an article published on business loans the author reminds us that the terms of a business loan varies and is granted on a case-by-case basis. Most of the time, a business loan is needed to correct a single mishap. Here is an example: imagine a small business that started just this year. Let’s say they are a charter company and take tourists out to sea several times a day. Suddenly they have major engine failure, and the entire engine needs to be replaced. The company is forced to shut its doors until the replacement can be made, but they don’t have the immediate funds to cover the cost. Thanks to alternative lenders, businesses like this one can get the cash they need within a day to keep operations running.

Small business matters

Small businesses stimulate the economy by providing people with income and servicing their local communities. When looking at the big picture, alternative lenders are often responsible for ensuring that they can continue to thrive. According to last year’s trends, the economy is beginning to recover. If things continue, the real estate market will once again be a strong entity as it once was.
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