It appears lending standards have a long
way to go before most businesses will
again qualify for financing.
Recommend Factoring to your clients with
Commercial Accounts Receivable on their books.
Factoring is the solution to the problem of a
lack of available bank credit.
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Business Credit a Long Way from Recovery
Standards for landing a small business loan are so high now that those that meet them probably in
reality don’t need them, as the cash flow, collateral and capital requirements are all met in a way to
allow them to probably self-finance the business via cash flow itself. That of course isn’t the case with
most businesses.
Concerns are that this could hamper any type of economic recovery that may come in the future.
In a quarterly survey of bank loan officers by the Federal Reserve, it was found that over 35 percent of
the bank loan officers responding said they had tightened up lending standards, confirming we’re far
from getting out of the woods yet with the credit crunch as it applies to business.
What the majority of banks are doing is borrowing from the Fed and then putting it in reserves at the
Fed to earn interest rates on it. In other words, they’re not lending.
Businesses need to know they’re in for a long credit crunch and plan and make decisions accordingly.
For More Information on Factoring Contact:
Chris Lehnes
203-664-1535
clehnes@VersantFunding.com