Insights into the world of small business lending and development
Many small businesses involve food. The baker, the butcher, the coffeecake maker and the farmer-in-the-dell are all likely to be small businesses.
But as small businesses, most of these food-related companies have the same problem: how do their owners get the cash they need to buy supplies before they actually make sales?
First, don’t despair. This situation is all too common for so many small businesses across America. Traditional lenders are often concerned with the risk involved in small business loans and unwilling to take a chance on a loan that might require seizing assets or foreclosing on property to recover the money.
Fundera announced on Tuesday the release of its new survey on the state of small business lending. The report asked small business owners about their experience with credit, lending, and financial resources. According to Fundera, the survey revealed that business owners do not know enough about the resources available to them, and as a result, they are not making the best financial decisions for their businesses.
When Rodrigo and Filberto Santoyo decided to open up a Mexican food truck in Denver, Colorado, they thought the process of starting a business would mimic what they found to be true in Mexico. What they didn’t realize is that having a credit history can go a long way in securing funding. “In Mexico, credit is used very little,” Rodrigo explains. As new arrivals, they didn’t have much of a credit history, and when they applied for funding, their application was rejected.
Q: I'd love to start my own small business, but I just don't have the financial or other resources I would need right now. I'm a millennial, and sometimes I think someone of my generation just isn't ready to take on the responsibility of small-business ownership. But I also hate the thought of working for someone else until I can accumulate enough money and experience to strike out on my own. Any suggestions?