It’s no secret that the past five years have been anything but kind to small business owners and entrepreneurs across the country. In fact, an unstable economy and variety of other factors have forced a number of small businesses to close their doors while also discouraging others from entering the market.
Fortunately, good news is on the horizon in 2013 thanks to a recent increase in small business loan approvals.
According to the latest Biz2Credit Small Business Lending Index, big banks are approving loan requests at the highest rate in over two years, while small banks are giving the green light to over half of all small business loan requests.
Last month, big banks reportedly approved 15.9 percent of small business loan applications, a 35.9 percent increase from February 2012 and the highest rate since Biz2Credit began compiling this information in January 2011. Similarly, small business loan approval rates have increased from 49.9 percent in January 2013 to 50.3 percent last month.
Rohit Arora, Biz2Credit Chief Executive Officer, attributes the higher approval rates to a stable economy over the last year and a half and attractive premiums on securities backed by Small Business Administration-guaranteed loans.
So what can small business owners do with this data? If you are a small business owner, now is one of the best times to receive a small business loan to expand your existing business or take the first step in entering the market. Three smart ways you can invest this money into growing your company include the following:
Making smart investments — Whether you need office space or a piece of machinery to increase efficiency, one way to expand your business is by investing in property, buildings and equipment. Increased loan approval coupled with relatively low interest rates make this the perfect opportunity for growth.
Improve IT capabilities — Online business applications can help you increase sales, view real-time metrics and also decrease spending on traditional IT expenses. In fact, Forbes recently listed “cloud computing” as an essential for small businesses in 2013.
Hire employees — As a business owner, you don’t have to do everything on your own. By allocating money and resources to hire an employee — or multiple employees — you can focus on more important tasks like growing your business. When hiring employees, make sure you have a hiring strategy and think about whether you need a full time employee, part time employee, or even a freelance worker.
Spring isn’t just a time of rebirth in nature. It can also be a serious time of growth and development for your small business. And with loan approval rates on the rise in the first part of 2013, the sun may finally be shining on Main Street.