Small Businesses and Lending; What You Need to Know

Small businesses have been hardest hit when it comes to the recent pandemic. Business slowdowns and actual closings were on the horizon for many local companies that had experienced significant financial loss. With business slowly starting to pick back up in 2021, merchants are trying to pick back up where they left off while having little to no money set aside for day-to-day expenses or an emergency if one should arise.



Ways to Use Working Capital

Working capital is just what it says, it is money in the bank that is used to keep the business operating on a daily basis. The money is used to pay monthly utilities, stock inventory, pay your employees, and take care of any expenses that may arise through the day-to-day functions of the business. Small business lending opportunities are now available to help your companies regain their footing and overcome the financial obstacles they are currently experiencing.



Are Small Business Loans Easy to Get?

While larger banks aren’t normally the best choice to get a small business loan, local banks are more willing to lend funds to a smaller, struggling business. The Small Business Administration is also at the top of the list when it comes to small business lending. Both local banks and the SBA have relaxed their underwriting requirements and have more money to offer. Companies may also be able to get merchant cash advances for their short-term needs.



Small Business Loans Are Becoming More Popular

Unlike larger banks, a local bank will often have established long-term relationships with individuals in the community that are also small business owners. When a small business owner needs financial help, the first place they turn will be to the smaller bank who has been there for them in the past. Prior to the pandemic, many business owners avoided applying for a working capital loan for several reasons. In some cases, they would have to go outside of their community or meet strict loan guidelines that made qualifying almost impossible. With the pandemic, most of that changed and the stigma of getting a loan isn’t what it was two years ago.



Where Can Small Businesses Go?

When it comes to small business lending, the Small Business Administration is helping more companies than ever before getting the funding they need. With so many changes being made in the qualifying guidelines and interest rates, small businesses can now look to their local banks for the working capital they need to make it through, not only their day-to-day operations but also for emergency situations.


Small business lending practices are gradually evolving and becoming easier to come by. Applying for small business loans is much easier and they are available for those who need them. The goal is to find the right lender that will offer you the terms you need at the right rates. The working capital is available. It’s up to you to look for the lender who will help you thrive. Look closely at what your business needs and talk to a loan expert at EJN Financial today.

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