There are at least two prominent motivations for small business owners seeking business loans without banks. One is a desire to avoid a bank at all costs because of personal and professional antagonism for their past and present behavior. In particular small business owners can point to business financing being reduced and eliminated by banks even though they were bailed out by taxpayers so that this kind of financial activity could resume at normal levels.
Another sound rationale for avoiding bank financing is purely logical and based on the fact that so many banks have failed and gone out of business. Related to the enhanced bank failure rate is the lack of availability for routine small business loans at banks still operating. Small business owners have already realized that they must find alternative business financing when their bank is not up to the task.
This article acknowledges why there can be a compelling business necessity to successfully obtain commercial loans without involving banks. To ensure that the main point (avoiding banks) is not overlooked, some lenders are using business financing slogans like “Think outside the bank”.
The idea of eliminating banks as a source of working capital loans and commercial loans has its roots in the increasing unpopularity of banks. From the early origins of American history banks and bankers have proven to be unpopular, and Thomas Jefferson is one who had similar feelings when he said that “banking establishments are more dangerous than standing armies”. In the contemporary setting, banks have undergone many structural changes that have nurtured a desire to leave bank relationships on hold.
Just as General Motors and Chrysler are now a shell of what they were just a few years ago, banks have also changed irreversibly. Except in paid advertising, it has become rare for either businesses or individuals to speak positively about their bank, but many of us still have warm feelings about earlier banking days. The stories about giving toasters away have unfortunately been replaced by foreclosure and credit card abuses.
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Tags: banks, Business, business finance, business financing, business loans, Finance
