As reported on CNNMoney.com the number of small business loans for the Small Business Association (SBA) flagship lending program declined 30% for fiscal year 2008, which ended September 30.  While the SBA doesn't directly fund loans it does guarantee a percentage of the loan as an incentive to banks to loan the money.  Due to tightening credit standards and a worsening economy, the SBA backed only 69,434 loans in 2008 (down from 99,606 in 2007). 

What is worse news for small business is that although the number of businesses backed by the SBA declined 30%, the actual dollar amount backed declined only 11%, meaning that although less loans were backed they were for larger amounts.  This signifies that a greater number of loans backed by the SBA, were for larger established businesses (though still small businesses by definition).  The tightening of credit standards seems to be affecting smaller businesses since most, larger, already established businesses may still be able to qualify for financing, albeit not as easily as in the past.

By contrast,  the Merchant Cash Advance business is booming, as more small business owners seek to find alternate forms of financing.   Contact us  to see how a Merchant Cash Advance can help your small business succeed and get you the cash you need.

This article was originally published by Michelle Chamberlain, Pennsylvania Mortgage Broker on www.ezmerchantadvance.com/theblog.