Borrowing Money for Business? Five Ways the Future will be Different

We’ve seen the extremes of borrowing money from the excesses of the sub-prime era to the credit drought for businesses.  What landscape will business borrowers face in the future?

1.  Non-traditional sources of business borrowing will be more common including money from family and friends and peer to peer lending sites.  I posted about the risks of borrowing money from family and the rewards of family loans.  Ray Martin covered borrowing money from family on this episode of the CBS Early Show:

2.  Education for business borrowing will explode as competition for money intensifies.  Borrowers will go back to school to get the best reception from lenders.

3.  Other non-traditional forms of borrowing money for business will increase as underwriting standards for traditional bank borrowing remain strict.  Payday lenders, auto title loans, credit card advances and tax refund anticipation loans will all be popular sources of money.

Here’s a short video explaining these sources for borrowing money:

4.  Business borrowing coaches will become a force in the new world of borrowing money.  A professional borrowing coach will have deep experience borrowing money for personal and business purposes. The borrower benefits from an advocate who does not have a conflict of interest with lenders.

5.  The lending market will find new ways to meet the demand for borrowing money for business.  The Wall Street Journal reported the partnership between Indian tribes and the payday lending industry.  They met the demand for short term borrowing by using their sovereign status to avoid federal and state payday lending laws.

The borrowing landscape has changed and will be different tomorrow.  Of course the first lender to break the pack and relax lending standards will send the borrowing pendulum the other way.

Business leaders, how are you adapting to the changing lending environment?


About Michael Shelton

Your Business Coach Facilitating Delegation and Work Group Engagement Michael Shelton has over twenty-five years of business and military accomplishments, including extensive experience with one of the largest, publicly traded real estate investment trusts (REIT). He is a qualified business coach with assignments in cross-functional work group management, strategic planning, unit leadership, joint venture acquisitions, executive education, mentoring, training and merger integration. Michael has accumulated best practices for building committed work groups from more than $4 billion of capital markets transactions and commercial property development. He served as a commissioned officer and helicopter pilot in the U.S. Army, and earned his MBA from The University of Arizona. Michael has served as a major conference panelist and is the author of Cash Flow Rich, Winning Ways to Evaluate and Finance Real Estate. Today, he helps business owners get more work group engagement as President and CEO of Shelton Business Services, LLC in Scottsdale, Arizona. Disclaimer: I don't offer investment, legal or tax advice. Talk to your broker, accountant or lawyer for investment, tax and legal help. I might own stock in the companies I mention on-line. My posts, tweets and other on-line activity are my personal thoughts and don't represent my employer or company.
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