NEW YORK — Small business owners are getting creative in finding financing sources including at credit unions as banks continue to tighten their loan standards, the Associated Press reported today.
Many are seeking out credit unions, online lending Web sites and other avenues, the article reported. Scott Metzger was turned down by three large banks to finance a restaurant and microbrewery in San Antonio, according to the article. A member of a credit union, he sought financing there and was approved within two weeks.
The article cited CUNA data that revealed business loans grew 20% in the second half of 2007 compared to the same period for 2006.
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Online lending outlets such as Prosper.com, Zopa Inc., GlobeFunder Ventures Inc., Virgin Money USA and Lending Club have also caught the eye of small business owners, the article reported. This, as the Small Business Administration's main loan program gave out 17.6% fewer loans by early April than in the same period last year, according to the publication.
Commercial banks are increasingly referring business owners to asset-based lenders, which float loans against incoming sales receipts and factoring companies that buy up a company's incoming revenue for a fee and give the owner capital up front, the article reported.
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