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As inflation and record low interest rates reduced the returns to savings, this decline may explain some of the dramatic fall in new business creations. The long run trend decline in savings has been accompanied by a similar decline in banks-give-business-loans.php">entry rates among small businesses. However, non bank lending is becoming an increasingly important source of capital. In fact, non bank finance companies currently comprise about 15 percent of small business lending and are better positioned for growth in this market than commercial banks. One prominent peer to peer lender, Lending Club, has seen its small lending business double every year since 2007, having made more than 16,000 small business loans. While only one player in a small market, the attractive yields offered by peer to peer lenders — coupled with a more flexible regulatory environment — offer considerable potential for small business lending. Peer to peer has also offered a valuable source of loans for borrowers with less than stellar credit. As commercial banks remain constrained, the future of small business lending may well see its largest growth occur outside the traditional banking sector. Myth 2: "We’ve never had a loss on our business loan portfolio". Some business lending evangelists claim a perfect record making business loans. However, peel back the onion and you find, it’s a matter of the "definition" of loss.

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A business loan portfolio brings risks that need to be managed.

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how to invest in small business loans S. Chamber of Commerce acknowledged the temporary extension of tax relief passed in December: “The activities of December will have a very, very positive effect I think on the overall economic environment, but particularly with regard to small business of confirming the tax rates, even though it’s only two years. ”4Panelists offered additional policy recommendations to support the operating environment for small businesses. For example, Senator Warner emphasized the need to expand the nation’s export capabilities. Mr. Bell echoed those views, calling exports the “number one market expansion opportunity for small business and frankly for all business. ” Bell also called for the government to finalize three pending trade agreements coming before the Congress. In addition, panelists discussed small businesses’ access to government contracts. Jorge Corralejo, Chairman of the Latino Business Chamber of Greater Los Angeles, addressed the need for more public data on the share of government contracts awarded to small businesses: “ou cannot analyze what you’re doing with the small business sector if you don’t know what’s going on…that kind of analysis is really critical to dealing with unemployment, dealing with contracting, dealing with lending. ”A wide range of policies has been established to help restore the real estate sector and address its impact on small business credit. For example, FDIC Chairman Bair highlighted federal regulators’ recent policy statement on commercial real estate loans: “e do not want our examiners criticizing an otherwise creditworthy loan just because the collateral has declined…a supervisory policy that requires criticism that additional capital be held against the loan just the collateral has fallen is highly pro cyclical, and we wanted to avoid that.

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The long run trend decline in savings has been accompanied by a similar decline in entry rates among small businesses.

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Thus, working capital actually depicts the financial health of the company in a short period.

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