Small Business Lending Still ElusiveJanuary 31, 2012
According to the NSBA 2011 Year-End Economic Report released today, small-business access to capital, while improving slightly in the last six months, continues to evade nearly one-third of all small-business owners. The report shows increasing interest rates on small-business credit cards, a drop in small businesses relying on traditional bank loans and nearly one-in-five small-business owners reporting less favorable terms on their loans in the last year.
Underscoring the ongoing difficulty small businesses face in garnering lending, according to the most recent Federal Reserve Senior Loan Officer Opinion Survey, only seven percent of large banks eased their lending standards for small-businesses while 13 percent—nearly double—eased lending for large firms. Small-business loans have been deemed “risky” by many lenders and regulators simply due to the company’s size.
This ongoing credit crunch and myriad horror stories from small businesses across the country prompted NSBA and On Deck Capital (On Deck) to work toward a partnership that would provide small-business owners with greater access to capital. Launched in January, the new partnership is designed to provide small-business owners with a one-stop destination where they can both apply for credit and gain detailed insights into how lenders view their business.
Traditional lenders historically have faced challenges underwriting small-business loans and, as a result, focus heavily on the personal credit score of the business owner when making lending decisions. This approach has left many healthy small businesses unable to access capital. Since 2006, On Deck utilized an innovative method of underwriting using data aggregation and electronic payment technology to look beyond the personal credit score of the business owner.
The NSBA-On Deck partnership will give qualified NSBA members exclusive pricing on working capital loans. In addition to delivering capital to qualified applicants in as little as seven days, On Deck has created a first-of-its-kind tool for small-business owners that can provide powerful credit insights.
Whether financing is an immediate need or required for future growth plans, all NSBA members can now receive detailed information on their lending profile and tips for increasing creditworthiness. In just a few minutes, NSBA members can have a comprehensive view of what a lender sees when they view their business—all at no charge.
NSBA and On Deck have a strong dedication to improving capital access for the small-business community. On Deck’s technology platform makes gaining detailed insights into your lending profile, as well as accessing capital, a hassle-free process for small business owners.
To learn more about On Deck’s small business loans, please click here.