San Francisco, CA (PRWEB) December 03, 2012
Continuing frustration with the tight lending policies of traditional banks, even three years after the end of the Great Recession, has small business owners turning to a new breed of lenders. These alternative lenders are breaking with the conservative lending practices of banks, automating loan approvals, and offering a more logical underwriting process for loan products.
This new breed of lenders does not rely on credit scores and collateral. Instead, they are using software applications that review the payment history, cash flow, and even the online reviews of companies to make loan decisions in hours instead of months.
The Lending Circle, a division of Sunovis Financial, is offering such loans. Small businesses can borrow as little as $5,000, and as much as $150,000 with repayment periods that span 3-18 months.
Thousands of small businesses who have been unable to secure a loan through traditional means are finding success and capital through these pioneering lending companies. More than 200 industries qualify. There are some industries that do not qualify, such as schools, residential home builders, lotteries, auto dealerships and check cashing companies. Here is a list of restricted industries for the micro loan.
“These micro loans are creating a whole new avenue for small businesses,” says Terry Robinson, president of The Lending Circle (a division of Sunovis Financial), a lending network that helps borrowers find financing nationwide. "Our mission is to help small businesses who in turn help rebuild the economy - they are the backbone of the economy. We also handle SBA loans and all other types of loans. But for fast cash for small businesses, our new micro loans can make an immediate difference."
Prior to the financial meltdown in 2008, the big banks loose lending standards meant that credit was not difficult for most small businesses. That has changed significantly, with just 14.2 percent of small business loan requests being approved by the big banks in October 2012, according to the Biz2Credit Small Business Lending Index. To qualify for a bank loan, small businesses must have strong cash flow, a pristine credit record, and sufficient collateral to offset the loan amount. These are tough standards to meet in the weak economy following the Great Recession. Plus, many of the big banks no longer consider small and moderate sized loans, claiming they are not cost efficient. Small banks are somewhat easier to qualify with, but only when the business meets the criteria for an SBA loan.
The new alternative lenders, on the other hand, are using their cash flow methodology to qualify a wide variety of small business ventures, from hairdressers to restaurants. They will even approve loans for businesses that do not accept credit cards, such as plumbers and HVAC technicians. Robinson estimates that 65 percent of the loans this year to businesses with less than 10 employees are unconventional, up from roughly 25 percent in 2010.
While banks do use computer models to review loans, the ultimate decision is made by a human loan officer. A new alternative lender, The Lending Circle, a division of Sunovis Financial, is able to offer and approve loan requests quickly, typically in 2 to 3 days. Repayment is made via daily direct ACH withdrawals.
About Sunovis Financial
The mission of Sunovis Financial is to help rebuild the U.S. economy, one loan and one business at a time. Today more than ever, small businesses need capital and assistance to thrive, and that is what Sunovis is focused on.