This morning our friends at The Coleman Reportshared some stats out of the Pepperdine Private Capital Market Project report. It’s a study of all major types of funding and contains survey data about what bankers have seen in lending trends.
Among other things, one stat stands out for me:
“Over the last 12 months, [lenders report] seeing decreased credit quality of borrowers applying for credit, with an increase in demand for business loans, leverage multiples and focus on collateral as a backup means of payment.”
This is a tough trend for businesses, especially small business owners. Increasingly, they’re forced to leverage their business or provide personal guarantee–all because their credit isn’t healthy enough.
Big take-a-way for me: Start being proactive about watching and managing your personal and business credit early, before you need to use it. Getting backed into a corner by bankers is no fun at all. 🙂
Jared Proctor is former Content Director at Nav, which helps small business owners access the right capital for their needs. He is married to a small business owner and has twin toddlers, so discovering time hacks is a matter of survival. Jared has over fifteen years of financial services experience and his advice has been featured in Forbes, Business.com, and Entrepreneur.