For small businesses that have been sitting on the proverbial fence about whether or not they should secure a commercial mortgage, it may be time to make a move. There are a number of factors present in the market that have created ideal conditions for small businesses to make that move toward commercial financing.
For one, interest rates are still low. Granted, rates have bumped up some and the Federal Reserve will like grow rates before the end of the year; however, commercial mortgage are still significantly lower for small businesses than they were 10 to 15 years ago. Furthermore, if the growth in the economy continues to push the need for further rate hikes, they are forecasted to not rise to the high levels previously seen in the late 1990’s and early 2000’s. With the promise of additional small rate hikes on the way, it is without question a perfect time for small businesses to secure a commercial mortgage.
The availability of capital is also very strong currently. Thanks to SBA loan programs and other small business focused commercial lending vehicles, small businesses find themselves sitting at a buffet table of options like never before. We wrote recently about the record number of SBA guaranteed loans that have been issued in 2015 and that is a clear sign of the large amount of capital currently available for small businesses. The days of frozen capital during the recession are just a memory. Capital has thawed and is in full bloom for small business owners.
The National Federation of Independent Business (NFIB) shed further light on the current positive conditions of commercial financing in their recently released Small Business Economic Trends (SBET) report. When it comes to meeting small business owners’ borrowing needs, the report said only 2 percent of small business owners reported that they were not satisfied. That is a record low according to NFIB. Moreover, 30 percent of owners said all of their credit needs are being met, while 57 percent said they did not need a loan, which was also a record high number.
During the recovery from the recession, the report noted that many small businesses saw no good reason to secure commercial financing, but that has clearly changed. Small businesses are finding the capital they need through companies like K2 Commercial Finance at rates and conditions that are favorable and flexible enough to not impede their business. A few years ago, commercial financing was listed as one of the top stresses for small business owners, but now it is clearly no longer a stress.
The bottom line is there is plenty of capital available at low enough rates that will only enhance a small business’ ability to grow their business with regards to commercial financing. While current conditions will likely stick around for a little while, small businesses should not wait too long to make a move as a drastic change in the economy could always bring activity to a halt like it did a few years ago. Therefore, it is time to jump off the fence and get into the commercial financing game.