A survey by researchers at Washington University in St. Louis found businesses with a previous lending relationship enjoyed a 57%-point advantage in obtaining a PPP loan, with 75% of “relationship-borrowers” getting a loan compared with only 18% of “non-relationship” companies succeeding in getting a PPP loan. The study further found that a personal connection between the lender and the borrower – such as both attended the same school, shared interests, or ties to nonprofits – increased the likelihood of obtaining a PPP loan by more than 7% points.
The researchers concluded that this proved favoritism in bank lending, but that is not the whole story. The study also highlights the power of existing relationships. Business owners understand how valuable their existing customers are and will go to great lengths to take care of them. This report again shows the importance of business owners develop and maintain a relationship with a bank lending officer. Having a friend at the bank pays off in many ways.
This report also shows the difficulty in obtaining a PPP loan as additional studies show banks making fewer loans than two years ago. Business owners have to be aware of their options if their bank turns them down for a loan. By turning to a factoring company, a business owner can immediately speed up their cash flow without going into debt or giving away equity.
American Receivable is a top-rated factoring company that offers their clients fast turnaround times at competitive prices. We are still owned and managed by the original founders who understand what it takes to make companies successful.
Call us today at 800-297-6652 or schedule an appointment to learn how accounts receivable factoring improves small business cash flow. In the DFW area, call 972-404-4726. To find out how invoice factoring can help get your small business off the ground, call Jack Stieber or Brad Gurney or complete our quick application form.