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Small Business Finance Lending Survives Despite Mixed Signals
Author : Stephen Bush
The usual political example of "mixed signals" is depicted by conflicting statements made by politicians in different settings, but the use of "mixed signals" is no longer restricted to the world of politics. As banks become more connected with politics, it should come as no surprise that "mixed signals" is now as accurate in describing the financial world as it is with the political world. Unfortunately for small business financing, "mixed signals" has become a regular description that applies to business loans and working capital.
As a descriptive phrase, "mixed signals" most frequently includes references to confusion and variation as well as deception. Particularly in a competitive business world where the mere appearance of confusion or deception can be devastating, this phrase is routinely intended to be critical and negative. With this viewpoint, it is striking to see how often "mixed signals" or similar words have been used to describe current banking activities (based on a recent online search). Because the actions and words of many banks are currently at odds with each other, the use of "mixed signals" seems to be appropriate and accurate, especially when viewed through the lens of commercial borrowers and business owners.
While lenders have indicated that business lending is proceeding at a normal pace, commercial credit lines have been increasingly reduced or revoked entirely and fewer commercial mortgage loans are being completed in most locations. A direct result of this is confusion among business owners about the true availability of business financing and commercial real estate financing. Due to mixed signals as well as other factors, many commercial borrowers are now reluctantly admitting that banks are just not what they used to be. In a way similar to many automobile manufacturers that are now a tarnished and shriveled version of what they once were, it seems like almost overnight most banks have lost the confidence of the public. With such changes, small business owners are facing a new commercial loan environment and must adapt quickly. Because their business banker is not as likely to be up to the task anymore, small business owners should not hesitate to admit that they must look out for their own best interests.
This is a practical and candid analysis of current circumstances facing most business owners. When unwinding a long-term relationship with a bank or banker, some of the same trauma that occurs when any positive relationship suddenly goes sour is likely to be present. After doing the best that they can, all parties are then likely to move forward. As in any change-related decision, the decision-maker (in this case, the business owner agonizing over the firing of their bank) should openly evaluate the probable consequences of not changing at all. If keeping the old bank is holding their business back, either by bad advice or inadequate business financing, most business owners will conclude that they should seek a new bank.
Despite the complicated and confusing lending climate for small businesses, there appears to be an adequate supply of new small business finance sources to fill the void left by the exit of many banks and other lenders from commercial lending. Having a reliable and effective business loan provider to consistently support the operational requirements of their business is what matters to most business owners after all is said and done. Several outcomes can be produced by small business loan confusion. The final decision for a commercial borrower impacted by the mixed signals will of course vary based on individual circumstances. The feasibility of finding a new working capital financing or business financing source is one of the most difficult issues to be considered in the process of small business finance decision-making.
Business borrowers should be prepared to take a more personal and active role in the commercial finance needs of their business in order to increase the chances of their business surviving despite mixed signals from commercial lenders. For small business owners seeking to learn more about any mixed signals they are experiencing with business loans, there are a number of business financing resources which will describe specific commercial finance issues in more detail.
Author's Resource Box
Stephen Bush is a small business financing expert who has worked with business owners for 30 years. AEX Business Cash Advances and Small Business Finance Programs
Article Source:
Articlebliss
Tags: business financing, business finance, small business finance, small business financing, finance, lenders
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Submitted : 2010-01-14 Word Count : 1 Popularity: 257