Since the onset of the 21 st century, the various access to small business loans have flourished. From typical business loans offered by local banks and credit unions to credit cards, crowdfunding websites, and specialized online lenders, (to only name a few), the small business owner has a plethora of financing options to choose from. Despite this commoditization of business funding, research on choice difficulty seems to suggest that it may be even tougher to choose an optimal funding source from so many alternatives.
Even within each category of financing sources, numerous lenders propose different procedures, rates, and terms, which can be quite overwhelming for the borrower. Decision research shows that having too many options often reduces engagement and increases decision difficulty for individuals in general. You’ll know what I’m talking about, if you’ve thrown away that 20th credit card advertisement envelop in your mailbox.
Moreover, the growth of online lending has resulted in the introduction of sub-optimal lenders that engage in less than ethical practices. Unfortunately, some lenders push small business owners to take on more credit than needed, or initially promise unsubstantiated terms and rates in a bait-and-switch scenario.
Yet, there is some hope. Reliable and experienced lenders – both offline and online – have begun to focus on dealing with specific groups of small business customers, so as to provide a more prudent and specialized financing advice in supporting businesses’ initiatives for success. By better understanding the characteristics of industry-relevant financial statements and business models, such loan provider offers optimized funding solutions in a more efficient manner. Small business owners are finally coming around, realizing that those cookie cutter, one size fits all small business loans being sold all over the internet are counterproductive and potentially detrimental to their business. Small business owners face unique challenges that require the partnership of an experienced funding firm, not product pushers or telemarketers. Indeed, for small businesses, whether receiving funds from an angel investor or a small business loan from a group like LVRG, business owners will benefit from finding a lender that knows their businesses, and has their best interest at heart.