When it comes to a business loan, applicants want to start and expand their company, or they need funds to get out of a financial jam. But the application process is not uniform across the board, which leaves room for inefficiencies small business owners inevitably face.
How Long Does It Take to Get a Business Loan
A new survey conducted by Lending Express reports inefficiency runs rampant. A number of small business applicants (7.5%) say they had to wait more than 6 months to hear back about a loan application. Another 16.3% said they had to wait more than a month.
The waiting process varies from institution to institution, but this length of time can be detrimental. If a small business owner has to wait up to six months or more, opportunities will go by the wayside.
As stated by Lending Express, a single loan can make all the difference in the world for a small business. With just a single loan, 61% of owners said they were able to turn profitable.
In the emailed report the company said, “Funding for small business owners is vastly important. It allows them to start, boost and even keep their businesses afloat. Luckily, though at times a trying experience, this survey found that most small businesses can become profitable after receiving just one loan.”
The survey was designed to determine the current business lending landscape. With a representative sample of more than 1,000 small business owners, Lending Express conducted the Google survey in April 2019.
Business Lending Landscape
Small business owners have a wide range of views on the current lending landscape. But the one common theme is they want their loans processed as soon as possible. So much so, 17% of Gen-Zers are willing to clean toilets for a two-day loan process. Another 14% are willing to go through a root canal for that speedy loan process.
It might sound comical, but the need to get the funding quickly highlights the anxiety small business owners are facing.
The anxiety is further exasperated with each loan denial. Because one in eight or 12.6% of owners say they have been turned down twice. Another 9% said it was three times. This has crushed the confidence of a segment of the small business sector.
More than a third or 36.5% say not all deserving small business owners get the funding they deserve. For Gen-Zers, the disillusionment is even deeper as 43.6% say they have no confidence in the integrity of the lending process.
When it comes to gender, millennial females are disenchanted with the lending process. Close to 9 in 10 or 89.5% millennial females feel there is gender-bias in lending. But only 58.7% of their male counterparts perceive gender bias.
The perceived gender bias is high across all ages. While 83.4% of all females say there is some level of bias, it goes down to 70.6% for males.
This survey offers some interesting insights into the current business lending landscape. It shows business owners have some predetermined understandings about the lending process. If this is not based on fact, it can deter them from applying for a loan altogether.
Whether you are applying for your first business loan or you are looking for some capital to expand, talk to the lender. Even if you are well informed, the information you have may not apply to this specific lender.
The more informed you are, the better you will be prepared to come up with the requirements the lender wants.