Small businesses see improved financing opportunities

On Behalf of | May 23, 2018 | Business Law |

For small businesses in Florida and across the United States, securing financing is an important part of ensuring ongoing operations or expanding services. In 2018, small businesses with less than $5 million in annual revenue are finding more success in securing credit and improving their cash flow according to a report from Pepperdine Graziadio Business School, and Dun and Bradstreet. In the first quarter of 2017, 32.2 percent of the businesses participating in the study had secured a bank loan for their business while 35.2 percent said that they were successful in doing so in the beginning of 2018.

Other businesses opted for asset-based loans. In this form of lending, a small business pledges its assets as collateral, including inventory, accounts receivable, or real estate. While the terms for these loans are not as favorable as bank loans, they are an improvement over other types of small business financing. In the first quarter of 2017, 23.7 percent of small businesses said they obtained an asset-based loan for the business while in early 2018, 25.4 percent said they were successful in securing asset-based financing.

Larger, middle-market companies were even more successful in securing asset-based financing. In early 2017, 66.7 percent of these businesses reported successful asset-based loans; in the first quarter of 2018, 77.8 percent said they were able to secure this type of financing.

When developing a business, securing ongoing and reliable financing can be an important part of making the business a true success. It is important to review all of the terms and contracts used when making a financing agreement in order to understand what is at stake. A qualified, experienced business law attorney provides advice and representation throughout the financing process to help ensure that a small business owner’s interests are protected.