Not All Small Business Lenders Are the Same
Whether you’re applying for a PPP loan or another type of financing, building a good relationship with a bank that takes you seriously will help.
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Keeping cash flowing has become increasingly difficult for many of America’s 30 million small businesses since the pandemic upended life. Just over half expect to be out of business within six months, according to a survey conducted in April, Bloomberg News reports. Many businesses are trying to conserve cash (we offer a few strategies in “Planning for Survival: Holding On to the Cash You Have”). Many businesses won’t make it unless they bring in more capital now.
That’s where the Small Business Administration, banks, and other lenders are supposed to help. To use the troubled Paycheck Protection Program (PPP), for example, you need to apply through a participating lender. Having a relationship with a lender is important for many other reasons, but too many of America’s smallest businesses don’t have one, or their existing lender isn’t giving them the time of day. “Traditional lenders can provide significant amounts of capital to small businesses that qualify for it,” says Luz Urrutia, who was a banker for about 20 years before becoming the chief executive officer of Opportunity Fund, a microfinance nonprofit. “And they have a wide array of other services to help businesses grow.”