Last summer, PwC revealed the results of a comprehensive study that confirmed a distressing trend that we at Mulligan Funding have witnessed for years: the difference between the working capital funding that small businesses need, and the amount that they have access to in the traditional lending marketplace (e.g. banks) is increasing – and many businesses are being swallowed up in the ever-widening gap.
Why the Working Capital Funding Gap Exists
Prior to 2008, many small businesses applied for a loan from their bank – and a good portion of them were successful. Obviously, the approval rate wasn’t 100%. But it was significant, and while some loans didn’t pan out, banks were well compensated by those that did. It was a functional, progressive system.
Then the Great Recession erupted in 2008, and banks en masse turned off the working capital funding taps for small businesses. Did they actually need to do this? NO! All they needed to do was tighten up their ridiculously irresponsible loan policies – such as doling out far more cash than most small business borrowers wanted or needed in the first place. But instead, they essentially used the Great Recession as the perfect “cover story” to take a major shift away from small businesses, and towards larger and more profitable customers.
The Other Part of the Working Capital Funding Gap
For small businesses, being left out in the cold by banks was and is bad enough. However, as the above-noted PwC study confirms, small businesses have significantly higher working capital funding needs than large organizations. As such, they don’t just WANT access to working capital funding: they often NEED it to survive.
The Silver Lining: The Alternative Lending Marketplace
Paradoxically, by failing to live up to their promise to support small businesses (their marketing material touts this commitment ad nauseum), banks paved the way for the emergence of the alternative lending marketplace, and for companies like Mulligan Funding lead the way.
Since 2008, we’ve proudly provided numerous small businesses across the country with working capital funding, in order to help them survive, succeed and thrive (watch our testimonial videos for some of the inspiring stories!).
We know what it’s like to lead a small business, and to face the ever-widening gap between capital and costs – whether they are for expenses or investments. We also know that timing is EVERYTHING, and the only thing worse than having dead money sitting in an account being eroded by inflation, is not having cash to seize a time limited golden opportunity.
That’s why our working capital funding loans have high approval rates, require no collateral, can be repaid early with no prepayment penalties of any kind. What’s more, our Funding Specialists are a phone call or an email away, because helping our clients succeed is what we do best.
Call Mulligan Funding at 855-326-3564 to discuss your financing options today!