Lending for Small Businesses

It might interest the citizens of Louisiana to know that ever since 2012, the Pepperdine Graziadio School of Business and Management has produced the Private Capital Access Index every fiscal quarter, which tracks how accessible private funding is to small and middle-market businesses. Interestingly, not only has the PCA Index been increasing year by year, but it has reached a new high during the first quarter of 2018. In more concrete terms, in Q1 2012, the PCA Index was 26.6; in Q1 2018, the PCA index reached 33.9.

The increase in the PSA Index can be seen in real-world numbers: The percentage of small businesses reporting that they have received funding over the last fiscal quarter increased from 32.2 percent in Q1 2017 to 35.2 percent in Q1 2018. Similarly, when it comes to asset-based lending, small businesses that have managed to secure a loan increased from 23.7 percent to 25.4 percent.

All of this should come as no surprise as the economy has become significantly more stable compared to 2008. Small companies have been enjoying a steady cash flow, supporting their working capital in the process. Consequently, the percentage of businesses that are in need of a loan in the first place has declined from 53 percent in Q1 2017 to 47 percent in Q1 2018. Almost 9 out of 10 business owners seem confident that their company is destined to grow this year.

Business owners looking to expand their companies ought to consider the possible benefits of seeking out a loan. Before taking any actual steps, they may wish to talk to a lawyer experienced in business law who can help show them the lay of the land. Otherwise, the business owners in question might fail to see some pitfalls that they could have avoided with the proper counsel.