Is It Possible to Obtain an Unsecured Business Loan in Florida?

Is It Possible to Obtain an Unsecured Business Loan in Florida?
Is It Possible to Obtain an Unsecured Business Loan in Florida?

Every day, you may hear stories about how difficult it is to obtain a business loan in the US. But small business owners in Florida (especially Southern Florida) are singing a very jovial tune these days. That’s because it’s now easier to obtain even an unsecured business loan in Florida.

The Current Loan Environment for Small Business Owners

For small business owners in South Florida, lending has become substantially less stringent since the start of the recession in 2008. According to one news report, the lending in that particular tri-county area has grown by an astonishing $414 million, which increases the total lending to $4.04 billion in 2013.

That’s an 11.3% increase from the year before, and it dwarfs the 3% nationwide increase in small business lending. It has been the most substantial lending for small businesses in the area since 2008.

For 2014, the outlook is even better. One loan broker company has already obtained 14 loans backed by the SBA for their clients as of September of this year, and they still have 10 loans in the pipeline. In comparison, they were able to get a total of 10 loans for clients for all of 2013. During the years of the recession, they were barely able to get any sort of loan at all.

If you’re a small business owner in Florida, then you may want to check out the database of the 50 largest lenders in the region.

What Are the Reasons for the Increase in Small Business Lending?

There are several possible reasons why a small business in Florida can now obtain a loan for growth and acquisitions more easily. Mostly it’s because many small businesses are doing much better these days, and therefore that makes them more creditworthy.

Another main reason is that it allows a bank lender to get involved with the entire book of business of tier borrowers. They can then be involved in the company’s deposits, wealth and treasury management, and insurance. This is a win-win situation, as it proves to be a more convenient setup for the borrower while offering a source of income for the bank lender.

Which Small Businesses May Not Obtain Small Business Loans?

Unfortunately, not all small businesses are created equal. At least not in the eyes of lenders. Some businesses may still not be eligible, and others may still be turned down.

For example, it is almost impossible for a startup business to obtain a bank loan in Florida—especially an unsecured bank loan. For most of the bigger banks, a small business can only qualify if they have at least two and a half years of experience, including tax returns. But even this rule has an exception. A few banks may even offer a loan to new businesses, but only if the borrowers are willing to pay a larger equity.

For startup companies, an unsecure business loan in Florida may be totally out of reach. But that doesn’t mean financing is completely unavailable to them. Some finance experts recommend that a startup may have to use factoring, credit cards, home equity lines of credit, as well as loans from friends and family.

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