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Commercial Lending and Small Businesses: What You Need to Know


Small businesses rely heavily on financing to grow and fund their business, and in today’s world, with a decline in commercial lending to small businesses, it’s becoming harder and harder for them to receive that funding.
 
Financing a small business is expensive, and most people don’t have the extra money to finance their own company, so loans are a necessity. According to the 2015 Year-End Economic Report published by the National Small Business Association, 27 percent of small businesses were not able to receive the funding they needed. This lack of support prevented their business from growing, forcing them to close or lay-off employees.
 
Luckily, there is some good news for those smaller businesses. Whether it is a short-term loan or an SBA loan, there are now other ways to receive funding.
 
The U.S. Small Business Administration offers a variety of loan programs for small businesses. One of the most popular types is the SBA 7(a) Loan Program. This program provides financial help for businesses with special requirements, such as operating for profit, falling under the SBA’s description of small and have reasonable invested equity. It offers low interest rates and long repayment terms; however, the approval rate tends to be lower, so excellent credit is needed.
 
Another popular program is the SBA 504 Loan Program, which is used for financing real estate or other major fixed assets. While these loan programs are beneficial, one of the downsides to an SBA loan is that the approval rates are much lower, and it takes a longer time to receive the loan.
 
If a business needs a loan quickly, short-term loans can be purchased. Due to higher approval rates, these loans have become more popular among small businesses. They allow businesses to take advantage of opportunities and quickly overcome obstacles. Short-term loans are beneficial if your inventory is only discounted for a brief time or if you’re waiting for clients to pay. Also, these short-term loans can be seen in your bank account within days.
 
In March of 2016, big banks only approved 23 percent of funding requests, while smaller banks approved 48.7 percent. At Paragon Bank, we work with small, local businesses to find the best loan options for them. Contact us today at 901.273.2900 to find out how we can assist you.
 
Since its founding in 2005, Paragon Bank has maintained a solid focus on the community and customer service. For more than 10 years, Paragon has delivered innovative products and financial expertise, convenience, and a deep understanding of what both businesses and individuals need from a bank, in order to provide solutions that make a difference. In the areas of business or personal banking, lending options or wealth management, Paragon delivers cutting edge technology, an experienced team and the most service-oriented staff of any community bank.
 
For more information about Paragon Bank, please call (901) 273-2900 or visit us online at www.bankparagon.com.
 

Posted: 9/14/2016 7:30:00 AM | with 0 comments
Filed under: Bank, Big, Businesses, Commercial, Finance, Ideas, Lending, Paragon, SBC, Small




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SMALL BUSINESS
Your business may be small, but that doesn't mean that your impact can't be huge! The Greater Memphis Chamber's Small Business Council serves to encourage, support, recognize and be a resource to small- and medium-sized businesses in the Memphis area. Here, our talented panel of contributors will present big ideas that could make a huge difference to your small business. And don't be afraid to ask questions ... no matter how small.

CONTRIBUTORS
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Public Relations
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JOEL MYERS
Human Resources
Joel Myers is a career Human Resources professional, with over 40 years in the field including 26 years in consulting.

TOM PEASE
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LORI TURNER-WILSON
Marketing & Public Relations
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INFERNO
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FISHER PHILLIPS LLP
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Fisher Phillips attorneys are ready to help you take a stand: in court, with employees and unions, or with competitors. Fisher Phillips has the experience and resolve to back you up. That's why some of the savviest employers come to the firm to handle their toughest labor and employment cases. The firm has 350 attorneys in 32 offices, including Memphis. For more information, visit www.fisherphillips.com.

PARAGON BANK
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Since its founding in 2005, Paragon Bank has maintained a solid focus on the community and customer service. For more than 10 years, Paragon has delivered innovative products and financial expertise, convenience, and a deep understanding of what both businesses and individuals need from a ban, in order to provide solutions that make a difference. In the areas of business or personal banking, lending options or wealth management, Paragon delivers cutting edge technology, an experienced team and the most service-oriented staff of any community bank.



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