Crowdfunding Small Business Loans

Who ever said getting small business loans was easy in a down economy was not exactly telling the truth.? They have always been easy to secure but the mainstream borrower has always looked toward conventional lenders and this has created a type of Pavlov?s dog borrowing scenario. So when times are tough and traditional lenders aren?t lending, people believe capital is hard to come by.

In the current economy some very resourceful people have been finding small business loans in some very interesting ways. With new buzzwords in the industry like ?crowdfunding? there will undoubtedly be some interesting stories to tell in the months ahead.? Small Business loans are still readily available for those who know how to look but let?s touch on a few examples of how people are starting to thing outside the box.

I?m not going to mention business names or specifics because it might not be that interesting.? It is the ways of getting business loans that are the story here and should inspire the entrepreneurs on the page.? First, a small business in Maine that had exhausted their savings and the good will of family happened upon one of a new breed of investment clubs where members invest $5,000 into a pool for lending.

This particular investment club had a model for loaning to local agricultural operations which ran sustainable local businesses.? In this example the borrower?s business was in livestock and after a thorough application process, the investment club made them a small business loan of $5,000 for 3 years at 5% interest.? A very small loan but at a great rate for the borrower who showed the ability to repay the loan in the specified time period.

An investment club like this which makes small business loans locally is the backbone of the new crowdfunding trend and is filling the void for micro loans which small business demand but large traditional lenders try to avoid.? Securing a few thousand dollars here and there for improvements or hires on the local level mean more to a community that the business serves than to the bottom lines of large institutions, but it makes all the sense in the world.

Crowdfunding also gives entrepreneurs looking to lend the opportunity to enter the market with safe loans at a moderate return.? They are not getting rich by any means but they can see where their money is going and the size of the small business loans gives most small lenders the ability to spread their risk over a larger number of small projects.? Lending less and borrowing less in an economic climate like the current one certainly seems to be a way to provide no nonsense small business loans.

Source: http://www.loanforsmallbusiness.net/crowdfunding-small-business-loans/

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