As sequestration kicks in, where will businesses turn for loans?

After Washington politicians failed agree on a budget that would effectively cut spending and bring down the national debt by March 1, $85 billion in federal spending cuts were automatically implemented. This sequester, part of the fiscal cliff agreement that was resolved in January, aims to reduce government spending across the board, but many are wondering how it will impact business financing. 

The blanket cuts the sequester mandates will slash funding to all government agencies and organizations, including the U.S. Small Business Administration (SBA), which many entrepreneurs rely on in order to receive startup funding or grow their enterprises. In addition, some expect sequestration will shock the nation's economy, which could result in stricter lending standards and risk management techniques, rendering small-business owners unable to obtain financing from larger banks. 

How small-business owners can deal with the sequester 
Entrepreneurs often have a hard time obtaining business loans for their growing companies or innovative startups, and the sequester could only make it harder for them to receive the funding they seek. With the budget cuts now in effect, traditional lenders such as large banks may be even less willing to finance unusual enterprises or operations they find too risky in the current economic climate. 

However, there are still ways entrepreneurs can grow their businesses or gather the funds to make their dreams of starting a company a reality. As the sequester kicks in and begins to impact the SBA loan programs and the economy in general, more may turn to alternative lenders for business funding. 

Where to turn for lending 
Small-business owners may begin looking to credit unions, friends and family, crowdfunding or small and mid-sized local banks as alternative ways to receive business loans. These providers typically can provide more lending opportunities to entrepreneurs running innovative startups who are unable to gather loans elsewhere. 

In addition to being more flexible with business lending, small and mid-sized local banks can also offer growing businesses more unique and personalized cash management options. More opportunities, custom service solutions and a more inviting atmosphere can all be big benefits for a small-business owner looking to enhance operations and ensure company finances are in good shape at all times, especially as the future of the economy remains uncertain.

Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs.

Getting Started

Find your ideal banker:

Featured Insights

Every time another high-profile company like Target falls victim to fraud, both consumers and businesses scramble to...

Investment volume registers above historical quarterly average ($3.8B) at $7.1 billion. The Silicon Valley continues...

The National Federation of Independent Business released its Small Business Optimism Index for July. Sentiment among...

Inc. magazine spoke to Morgen Newman, who...

Boudin Bakery is one of the oldest businesses in San Francisco, having started in 1849 as the originator of San...

Early indicators show entrepreneurship is growing in the U.S., according to USA Today. Banks are easing credit...

Employment - Men still lag behind women. Overall, men have 699,000 fewer jobs now than they did in December 2007,...

Companies that only do three or four international sales a month are often not aware of the various payment...

Recent News

09/03/14
San Jose, CA – September 3, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
BusinessWire
07/28/14
NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (“KBRA”) has assigned senior...
07/24/14
San Jose, CA – July 24, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
07/22/14
Conference Call and Webcast Scheduled for Tuesday, July 22, 2014 at 5:00 p.m....
San Jose Mercury News
06/26/14
The award is a donation from Bridge Bank and Heritage Bank. Mr. Science makes a...
06/09/14
San Jose, CA – June 9, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
06/05/14
San Jose, CA – June 5, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
06/03/14
San Jose, CA – June 3, 2014 – Bridge Capital Holdings (NASDAQ:BBNK), whose...
Orange County Business Journal, Jane Yu
05/28/14
San Jose-based Bridge Capital Holdings has pegged Costa Mesa as a key location for...

Twitter

Featured Insights

Featured Insight

Every time another high-profile company like Target falls victim to fraud, both consumers and businesses scramble to...

Featured Insight

Investment volume registers above historical quarterly average ($3.8B) at $7.1 billion. The Silicon Valley continues...

Featured Insight

Boudin Bakery is one of the oldest businesses in San Francisco, having started in 1849 as the originator of San...

Recent News

The National Federation of Independent Business released its Small Business Optimism Index for July. Sentiment among...

Twitter