You’ve probably heard that banks have tightened credit and are hoarding cash, that they aren’t lending and small businesses are suffering because of it.
Nothing could be further from the truth.
While it’s true that many banks reduced lending in the past few years, capital is once again becoming available as bad loans are liquidated and money is freed up from the reserves for such loan losses. Healthy banks, large and small–including Bank of American Fork–have money to lend and are actively seeking qualified borrowers.
The challenge is that there are not enough qualified borrowers seeking loans.
Many businesses are holding off until they see a more solid economic recovery. They don’t want to chance expanding when their business hasn’t yet picked up to comfortable levels.
But for those businesses that are already in a healthy position, there has never been a better time to expand. Market share can be gained while competitors hold back, and banks are eager to make loans for commercial real estate, equipment and inventory. Banks’ appetite for business loans, combined with torpid loan demand and low interest rates, creates ideal conditions for the small business owner seeking to grow.
As always, borrowers must be in a position to repay a loan. That means they must have good credit, reliable cash flow, a solid business plan and collateral to back the loan. But if these elements are in order and you’re still feeling reluctant, talk to your banker soon to see what your options are.