Whether out of ambition or necessity, companies compete for limited loans

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Entrepreneur Toni Brewer isn’t intimidated by the current economic climate.

Brewer, a former educator who owns five daycare centers in and around Atlanta, speaks confidently of ambitious plans for her next business ventures — a sports bar and salon and spa.

Like many small business owners, however, Brewer needs the money to fulfill his dream, which usually means getting a business loan, which in turn means making sure the loan application is in order.

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“It’s basically getting your documentation together, getting approval, and then moving forward,” says Brewer.

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Small businesses take out a loan

Borrowing money is something many businesses do, even at a time when rising interest rates and talk of a recession could set others back. Some business owners, like Brewer, aren’t deterred by such talk because they have ambitions to achieve.

Others seek out debt because they have little choice, forced to apply for loans because inflation or other factors are making their business cash-strapped.

In fact, 40% of small businesses said they took out a loan in the third quarter of this year to fight inflation, the US Chamber of Commerce reported in its quarterly Small Business Index.

But getting a business loan is not always an easy task. Many lenders look askance at loan applications that don’t meet their borrowing needs, and they send unlucky entrepreneurs on their way due to poor credit, the business is relatively new, the owner has no no solid business plan or for other reasons.

Understanding what loan opportunities are available and what lenders are looking for can make the difference in the success or failure of a loan application, says Elijah McCoy, CEO of McCoy Brokerage Service.

It was McCoy who helped Brewer secure most of her capital, other than a hard-money loan which she later refinanced with his help.

“Different lenders target different types of investments for their portfolios, so it helps to know which lender is best suited for your type of business,” McCoy says. “The trick is to match the business owner’s goals with the most suitable lender as soon as possible.”

Because business loans aren’t always easy to get, the Biden administration recently announced a proposed policy change that would allow new lenders to take advantage of the Small Business Administration’s loan guarantee.

Make more money available

The goal is to make more money available to small businesses, especially in minority and other underserved markets “where borrowers are most excluded from current lending,” the White House said.

The more opportunities, the better, says McCoy, who founded her company in 2006 after seeing too many business owners struggle for funding. Within two years of the birth of his brokerage firm, the nation fell into the Great Recession and lending in general plummeted.

In the years following the recession, small business lending rebounded, but the recovery was weak. This was at least partly due to a decline in the number of large banks, community banks, credit and savings unions, a trend that began as early as 2004, according to a study by the Financial Protection Unit. consumers.

These factors make it even more important that small business owners who need money learn as much as possible about lenders and their requirements, or at least partner with someone who has that knowledge, McCoy says.

“Put all your ducks online,” he says. “Do your homework, do all your due diligence. Know the company you are going to submit your information to.

McCoy says the money is there with opportunity, whether the business owner is planning a start-up, expanding, or just needs working capital. But borrowers need to know all the places to look and the correct moves needed to achieve the goal.

Then, just like Toni Brewer did with her five child care centers and plans for the sports bar and spa salon, it’s about making those business dreams come true.

About Elijah McCoy

Elijah McCoy is CEO of McCoy Brokerage Service, a company he founded in 2006. McCoy’s business works with businesses across the country trying to secure financing. Much of McCoy’s clientele is in the health field, such as doctors, dentists and pharmacists, but he has also worked with a wide range of people in other industries. He is a certified commercial lending expert and financial consultant.


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