Updating Business Finance Options Without Banks

There are at least two prominent motivations for small business owners seeking business loans without banks. First is the common occurrence of disliking banks because of prior problems and mistreatment, and there are more accounts of similar difficulties reported everyday. As one example, most commercial borrowers are aware that bailouts funded by taxpayers have not resulted in a normal level of small business financing.

For a second example, banks are failing at a rate that alarms most observers so logic dictates that small businesses should not book passage on a ship that is about to sink. Related to the enhanced bank failure rate is the lack of availability for routine small business loans at banks still operating. If their bank is not up to the fairly normal task of offering business financing options to them when they need it, a prudent borrower must be prepared to take their business elsewhere.

This article acknowledges why there can be a compelling business necessity to successfully obtain commercial loans without involving banks. Some lending sources have even adopted a variation of the slogan “Thinking outside the bank” to emphasize the potential advantages of business financing without involving a bank.

The growing bank unpopularity has provided plenty of motivation for finding commercial loans and working capital while also eliminating banks. From the early origins of American history banks and bankers have proven to be unpopular, and Thomas Jefferson is one who had similar feelings when he said that “banking establishments are more dangerous than standing armies”. The dramatic bank changes seen during the past ten years or so have simply served as a renewed inspiration to forego banker relationships whenever possible.

Because of specific legal restrictions, banks cannot file for bankruptcy in the way that General Motors did but banks have still changed just as dramatically as if they had. Except in paid advertising, it has become rare for either businesses or individuals to speak positively about their bank, but many of us still have warm feelings about earlier banking days. Foreclosure notices and exorbitant credit card fees have become the contemporary bank images to replace one of giving away toasters.