There is one clear conclusion we can reach from the SBA’s PPP loan process.
Financial institutions are not extremely interested in lending to all small businesses even when the loans are 100% guaranteed by the SBA.
In the first round of the PPP loans, the private lenders (primarily banks) took care of their commercial customers who they really wanted to service. These were their best customers that probably already had lines of credit, commercial loans, and sizeable checking accounts with the lender. In short, these were low-risk, high-profit customers.
The reasons why very small businesses had difficulty getting PPP loans are the same reasons small businesses have difficulty getting access to capital at any time. They aren’t viewed as a preferred, low risk and profitable business-loan customer.
If you are one of these small businesses unsuccessfully looking for capital, you might want to check out private capital.
I’m not talking angel investors or venture capital. Most reading this aren’t the kind of high-tech business needing millions to ramp up to be sold off.
However, if you are a small business with two or more years of operation providing goods or services, you can find out how your contracts and the clients you invoice can be turned into ready capital.
Brian Cox is with South Star Capital, a family-owned business in Mount Pleasant. His company does not make loans, but it does provide the capital a small business needs to operate and expand.
If you are looking for another option for accessing capital, call Brian Cox at 843-800-8292 (w) or 224-659-3903 (c). Or email him at firstname.lastname@example.org.
This may or may not be a good fit for you. But it is another option for accessing capital.