Capital Alliance Group would like to take a moment to reflect. Now that National Small Business Week is now over and we’d like to take the time to talk about this week and what small business means to us as a company. As the name might imply, Capital Alliance Group is all about working capital. Or more specifically, getting that liquid capital into the hands of small business owners who may not have the cash flow to grow their business, and are finding it increasingly difficult as time goes on, to get that funding through traditional means, such as a bank. Capital Alliance Group started life as a small business and as we grow, we do not forget how we got to where we are. And it would be a hard thing to forget anyway since Capital Alliance Group’s core mission is to help small business in America.
The President of the United States has set aside 5 days for celebrating small businesses and their contributions to our country every year since 1963. As important as small business is to the health and prosperity of the nation, Capital Alliance Group thinks that maybe a Small Business Month might be even more fitting. This year Small Business Week has been running from Monday, May 4th through today, Friday, May 8th and Capital Alliance Group hopes you’ve made the most of it! By the time of this writing, in commemorating today as the last day of the 2015 National Small Business Week, the awards ceremony will be taking place in the South Court Auditorium at The White House. This awards ceremony is a chance to close out the week by recognizing top small businesses in a cross-section of American industries, along with the people that make them run.
In April, head of the Small Business Administration, Maria Contreras-Sweet announced the National Small Business Week awardees for this year’s event and said, “National Small Business Week is a chance to honor our nation’s 28 million small businesses and renew our commitment to fostering the entrepreneurial spirit that is central to the American experience.”
This quote typifies just how important small business is to our country. For almost 240 years now, the fabric of America has been woven from the loom of entrepreneurs setting out to create and run their own businesses. And the thread of each diverse business they create combines to create a rich tapestry which represents that intersection of entrepreneurialism and the hard working life that combines to evoke the American Dream.
As poetic of a metaphor as that may be, it gains powerful relevance when we look at the facts: More than half of American’s make their living by doing one of two things: either owning a small business, or being employed by one. And every two out of every three new jobs created in the US each year is created by small business. Small Business is very much the backbone that supports our nation’s wealth and prosperity. As these businesses grow, the most successful ones may eventually grow out of their ‘small business’ descriptor, and become larger businesses providing jobs to even more Americans. All the while, as these businesses grow, small businesses will be created to take their place, and then over time, they will start to grow. This cycle has been taking place for many generations now and has propelled this country to great heights.
As clear as it is that as the health of small businesses goes, so goes the health of this country’s economy, these days small businesses are having a hard time getting loans through traditional means (banks). Business loans have long been essential to getting a small business off the ground, so to speak. And the unavailability of funding means that less and less small businesses are getting off the ground. As we have just illustrated, if two-thirds of your nation’s job creation is from small businesses, we need to do something to ensure their success. The Small Business Administration can only do so much.
Small businesses need capital. That is the nature of the beast. They are created grass-roots style and are started with sources like a person’s lifetime worth of savings, or even less in many cases. Many people can get a business off the ground with whatever capital they have on their own, but once those funds run out, when it comes time to grow, where will this investment capital come from?
It used to be that a small business owner could simply go down to the local community bank and apply for a small business loan. These small community banks would build a relationship with a local business owner; take a personal stake in that business. Their success was the business owner’s success.
Unfortunately these banks are no longer around in great numbers. Either failed or gobbled up by the large publicly-traded banking oligarchy made up of the Bank of Americas, Citibanks, and Chases of the country, these banking conglomerates have determined that it just isn’t profitable to lend to small businesses. They have no time to build relationships with you and your small business. They do not want to lend to you.
Luckily, American ingenuity strikes again. If there is a need, and a way to profit off filling that need, rest assured it will get filled! Small Business Lending 2.0 is a slightly different, but no less effective at getting small businesses the loans they need—far more effective in fact, we would argue.
No longer is a FICO credit score the most important thing at stake when determining if a business owner is eligible to receive a loan. That method is not only antiquated, but also highly skewed due to the damage done to so many people’s credit scores during the Great Recession. Couple that with the narrowed lending standards that many banks adopted after having them wide open for so many years, and that means nearly no one has ‘good enough credit’ anymore to get a loan from a bank.
But to get a loan from a company like Capital Alliance Group, credit score is only a very small thing we look at when considering a business’s eligibility. While a variety of factors are considered, the one factor with the most weight is a business’s cash flows. If you have a history of healthy inflows of gross proceeds, you are very likely to get a loan! For example, think of a restaurant that has steady business every day. In fact, they are more than steady; they are so popular that they would like to add a second location. They don’t have the large sum of money they need for that, and no bank will lend to them. All that business they generate day-to-day, all the money coming in from the sales made from their daily operation could make them very eligible for a business loan through Capital Alliance.
And it isn’t just restaurants of course. We provide loans to a wide variety of businesses all over the United States, even Canada. Small businesses are the lifeblood of America and the lifeblood of Capital Alliance. Banks may not want to lend to you, but we do. Together, we will help keep the fabric of the American Dream alive and thriving.
As this year’s National Small Business Week comes to a close, banks may no longer feel this way, but we certainly do: “Your success is our success”