How Covid Is Changing Your Chance to Get a Small-Business Loan

Interest rates are at record lows and banks flush with cash are eager to issue loans. The economy is expanding, inflation is on the rise, and the economic outlook is strong. On paper, now is a great time to borrow money to invest in your small business or buy a new business. But in reality, lending preferences favoring specific groups mean only the privileged few can access this abundant and cheap capital.

“No banks want to lend to a 3-year-old business,” said Rob Spiewak of MOR Kombucha. “It’s too risky. They say they want 24 months of steady profits, but that’s unrealistic for a rapidly growing company.” Three months ago, Rob thought it would be a great time to ditch his lease and purchase a new facility for his rapidly expanding business. But banks gave him a hard no.

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