Fresno, CA -- (SBWIRE) -- 08/14/2014 -- We say that because access to capital from traditional sources has fundamentally dried up for small business since the start of the recession. Small business has taken a beating and this news from Wells Fargo is good news in my opinion.

“Right now one of the most important things we can do is grow the small business segment, not just for our bank but from the standpoint of the economy,” said Jim Malcolm, Wells Fargo’s northeast small business strategy director. “This is where we are seeing a lot of growth and where we want to encourage growth and success among smaller businesses that are getting started.”

Wells Fargo isn’t the only traditional lender that is recognizing that the market is changing either; BBVA Compass recently inked a partnership agreement with online alternative lender OnDeck to help borrowers who might not fit their normal loan criteria, but still need to borrow capital. BBVA also recently purchased the online lender start-up Simple to help them streamline the lending process, turn loan applications faster, and help make less-than-perfect borrowers profitable. Along with poaching some of the top digital bankers in the country, BBVA Compass is demonstrating they are serious about small business lending.

“Our goal is to help clients and prospective clients feel more in control of their financial lives,” said Jeff Dennes, the new head of Digital Banking at BBVA.

Although the new digital push Dennes and his team are focusing on includes a number of consumer banking initiatives, We suspect the future also includes streamlining how they work with small business owners too.

We recently sat down with Stephen Sheinbaum, President and CEO of Merchant Cash & Capital (MCC), one of the leading alternative funders, to talk about the trends we think many of us are recognizing within the space. MCC is on the Lendio platform and Sheinbaum is one of the guys whose opinion regarding alternative funding sources and small business financing I’ve come to appreciate over the years.

If we’re not familiar with MCC, since 2005 they’ve funded over $680 million through more than 30,000 transactions—nothing to shake a stick at.

When we asked him about his perspective of the current small business loan market he said, “We’re experiencing the culmination of the last several years where traditional banks have been extremely unwilling or unable to serve the small business community.”

We both agreed that small business is really the job creation engine within the U.S. economy, accounting for roughly 50 percent of jobs and 74 percent of new job creation. To fill a void left by traditional lenders over the last few years, the better financed and more sophisticated non-bank lenders have helped streamline the small business loan process, put millions of dollars into the hands of business owners, and improved the borrowing experience. No wonder traditional lenders like BBVA Compass are leveraging the partnerships and buying the online players they are. They see the writing on the wall.

“What we’re seeing in all this news is free-market forces doing what they’re supposed to be doing,” said Sheinbaum. “Forward-thinking traditional bankers are looking at the platforms that profitably provide great service to the borrower to understand more about the technology non-bank lenders are using and how they (the bankers) can improve their customer experience.”

That said there’s a lot more to the success of non-bank financers like MCC. Sheinbaum suggests traditional lenders and non-bank lenders look at some of the lending fundamentals differently, like:

- The borrowing experience

- The way banks and non-banks score borrowers

- The ability to make quick decisions

- The more streamlined paper trail associated with a loan application

- In fairness to the bank, much of the things small business borrowers dislike about the small business loan process is the result of regulation—restrictive regulation that keeps capital out of the hands of small business owners.

Additionally, Sheinbaum suggests, “Large banks just aren’t nimble enough to do what alternative lenders are doing. Non-bank financial institutions, like MCC and OnDeck are simply able to provide a more expedited experience for the small business borrower. Most transactions at MCC are funded within hours or days as opposed to weeks or months at a traditional bank.”

Jessie Singh, director of the Biz4loans, delivered that message to lead off the small business seminar Tuesday in celebration of Indiana Small Business Week.

“We are committed to offering opportunities to Gary residents who start and run, or who have current businesses. Those businesses need to fit with our vision for the future,” Campbell told the dozens of current and potential business owners who attended the seminar at City of Gary Annex, 839 Broadway.

The seminar organized by the U.S. Small Business Administration Indiana District Office in Indianapolis brought together speakers to explain how lenders provide business loans, how to get help writing a business plan and how to sell products to government agencies such as the Indiana Department of Transportation.

Regional director of the Northwest Indiana Small Business Development Center Lorri Feldt said the agency serves Lake, Porter, LaPorte, Starke, Pulaski, Jasper and Newton counties and works with small business owners and startup entrepreneurs.

Free one-on-one business counseling begins the process of using the NW-ISBDC, she said. Other services include monthly workshops, such as Launch ones Own Business and QuickBooks, providing valuable, high quality demographic data and connecting people with resources throughout the area.

To obtain the necessary financing or capital to open and sustain a business requires a detailed business plan, Feldt said.

“This is like a game plan for a sports team,” she said.

Marty Anderson, lead economic development specialist with the U.S. SBA Indianapolis office, said the SBA helps small business owners through the 7(a) Loan Program and the 504 Certified Development Company loan program.

“There are three C’s of the SBA – counseling, capital and contracting. We provide the public with mentoring, which is the counseling; access to capital and government procurement,” he told the group.

“Remember there are no grants for startups and to expand the business. What one get is a loan,” Anderson warned the group.

“The SBA’s role is primarily a guarantor of business loans made by financial institutions,” he said. “They are always 100 percent on the hook for the loan because we are using taxpayer dollars.”

For those with credit problems or no credit history, microloans can be an alternative to obtain startup capital to open a business and to repair credit ratings, said Kyle Johnson, a lending team manager from Accion Chicago.

Accion clients haven’t been able to obtain loans from banks because of low credit scores or no credit history, he asid.

“We’ve been lending for five years in Lake and Porter counties. We are more flexible on requirements (than standard financial institutions). As long as we can see what’s on their credit report, we can work with them,” Johnson said.

“Our interest rates range from 10 percent to 18 percent. It’s not as low as a bank, but it’s lower than a credit card,” he said.

About Start up Business Loans
As commercial loan brokers, our mission is to provide our clients with the highest quality of service and efficiency. We provide our clients with extensive loan processing by experts on our quick, simple and safe process, while closing loans faster than anyone else. Here at Biz4Loans, the customer is our top priority.

Who We Are
Biz4Loans is a California-based loan company with an exciting new way of quickly closing commercial loans for businesses small and large. With a customer-centric focus and a high standard for quality service, we embrace new technology to pass cost savings on to our business clients.

Entrepreneurship Advocates
“Entrepreneurship is living a few years of the life like most people won’t, so that one can spend the rest of their life like most people can’t. “ – Anonymous

We believe entrepreneurship to be one of the most rewarding journeys that a person can pursue and that no two entrepreneurs are the same. Some seek a better life for themselves and their families while others take on the risk in pursuit of independence. Whether it is a small town where everyone knows each other or a big city that never sleeps, every community relies on entrepreneurs to create and provide jobs and to usher in new possibilities.

At Biz4Loans , we understand the challenges that entreprenuers face in financing their venture. We also understand that a startup entrepreneur frequently has to wear many different hats while her company is getting off the ground. This is why we provide a quick, convenient, and detail-oriented process that achieves results without unnecessary delays or obstacles.

For more info visit http://www.biz4loans.com/