Small Businesses Get Smart With Creative Financing

Living in the United States for the past 10 years has seen many affected by one of the harshest boom and bust cycles in a lifetime. Not since the depression has there been a scenario where so much wealth was lost after being gained over such a short period of time. At one point, times for financing were easy, and banks had their doors open to pretty much anyone who required capital.

But now, sadly, that has all changed. Banks themselves are suffering from a serious lack of capital, and the small business owner has suffered as a result. In an attempt to provide credit relief to many small business owners like Glen Markstrom of San Diego’s All Clear Tree Service, equipment leasing companies have begun to work directly with many entrepreneurs.

“I never really considered leasing before,” says Markstrom, whose tree service company has won local awards. “Leasing did end up saving my bacon when the banks let me down. It’s nice to know there are options.”

The leasing industry has understood that its main competitor, the banking industry, is in a situation that will probably not clear up any time soon. The result is that entrepreneurs are accepting leasing as a more viable form of capital equipment financing. Times change in America, but thanks to equipment leasing companies, the availability of capital doesn’t.

Small Business Struggles Still, Despite

If there is one area of the American economy that has been affected dramatically by the housing crisis and then the credit crisis, it is the small business sector. It is a basic fact that people are just simply not spending any more on the kind of high quality goods that they once spent on. As a result, small businesses have had to cut employees and investments because demand has continued to bounce along the bottom. On the other hand, these businesses still need critical equipment in order to survive.

Banks may not be able to offer the credit that small business people desire, but even in these recession laden times, equipment leasing companies can. This may be the one truly significant participant in the small business financing industry over the past few years, as banks have effectively shut off capital from their small business clients. This has led entrepreneurs to discover a new form of financing that works better than they would have thought.

Is Capital Really Coming?

Currently, the Federal Reserve continues to pump liquidity into the in hopes creating capital that the banks can then loan out to small business people. It’s a worthy attempt, and is certainly something that has never been seen before on such a massive scale. But the truth lies in the collective frown of small business people looking for financing across America. Banks will always have their reasons, but the fact is, its less about the fact that entrepreneurs are not credit-worthy than it is about the fact that banks are often in a situation where they are technically insolvent.

With their hand forced, small business owners have decided that enough is enough. Alternative forms of financing, such as that provided by leasing companies, have become a savior for small business. Suddenly, entrepreneurs are realizing they don’t have to go begging to a loan officer in order to obtain key equipment to run a business with. Despite what many people say, is still a good time to be a small business person in America. Thanks to leasing companies, anyway.