Businesses Turning to Alternative Lenders in Post-Recession Economy

The economic recession that started in 2008 had disastrous effects on the personal finances of millions of Americans, many of whom are still struggling to recover. As the entire country reigned in their spending and stuck to the essentials, industries were sucked dry and hundreds-of-thousands of SMB’s were forced to close their doors.

For people who aren’t business owners, it’s easy to forget that a business needs cash flow too in order to survive and thrive. Many businesses that succumbed to the recession did so because they simply could not get the funding they needed grow. Unfortunately, the money that businesses need so desperately comes from either banks or investors, and with Wall Street in the gutter there was no one there to lend a helping hand.

Fast-forward to 2019 and big banks are still not doing well. They’ve been dragged through the muck since the recession, and have been forced to agree to billions of dollars worth in settlements with the Federal Government for their knowledge and involvement in the mortgage market collapse. Needless to say, banks are still not ready to start opening their coffers to hopeful yet risky businesses. So where will the money come from that SMB’s so desperately need in order to kick start the economy? From alternative lenders.

Alternative finance used to be treated like a four-letter word. Post-recession millions of normal, average Americans have started turning to products like payday loans, cash advance loans and installment loans instead of using a traditional bank. Over the last couple years industry competition and state and federal regulations have forced out a lot of the stagnant and predatory lenders who prey on needy borrowers, and they have slowly been replaced by tech-savvy, innovative lenders who provide helpful and safe short-term loans.

One thing that American businesses know: when a product sells, give people more of it. Today people expect easier and more flexible ways to access and manage their money, and businesses and business owners are no different. While banks are floundering, nickel-and-dimming their customers trying to recoup the billions they owe the Feds, smart and savvy alternative lenders are moving in to fill this very important role. Alternative lenders allow business owners to skip the lengthy application process, the condescending scrutiny from bankers, and the inflexible loan conditions. Even a company that only needs a few thousand dollars to make a necessary purchase, or cover expenses through an unusually slow month, can get the money they need to keep business moving.

What we’ve learned through eight years economic struggles is that we need drastic changes in how we manage our money, from the individual and personal level, to the decisions policy makers make in Washington, to how the Internal Revenue Service collects our taxes, to how bankers and investors move our money on Wall Street.

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