Timing has a lot to do with many things – from photography, athletics and science, doing the right things at the right time can greatly affect the outcome of the situation in question. While you might not think of small business financing as something that is influenced by timing, or rather, the time of year, there are some interesting points to make about how small business loans and small business lending are affected by when you spring for that much-needed loan.
We Can Finance You Regardless of the Season
We’ll preface the rest of our blog post by saying that, no matter what time of year it is, The Commercial Finance Group will always be there to help you find the right custom lending solutions and asset-based loans for your business. We know that building up and successfully maintaining a small business is no easy feat, but we can make achieving your ideal growth easier and quicker through our working capital solutions.
To learn more about our asset-based loan solutions here at The Commercial Finance Group, visit here. Let’s take a brief look at the correlation between the time of year and small business loans.
December Might Not Be The Best Month
Nearly four years worth of data was analyzed by NerdWallet, a financial comparison and advice company, that found that December had the lowest acceptance rate of small business loans on average. Even those that were approved for a business loan in December paid a considerable price for getting approved by having the highest average interest rates for any month of the year.
The data was analyzed from 177,451 Lending Club applications for small business loans from January 2012 to September 2015, regardless if they were accepted or rejected.
Inventory Levels
Even after the near-four years’ worth of data was analyzed, it isn’t quite clear as to why December seems to bring out the highest-risk borrowers. However, it is theorized that it may have to do with inventory level. Across the United States economy, the biggest inventory increases occur in October – as such, if a business takes delivery of inventory in October and suppliers are required to pay within a certain period (60 days), then those payments would be due in – you guessed it, December. So, some businesses facing that cash crunch may need to turn to a small business loan to cover those costs.
Consider November To Be Thankful
The analysis done by NerdWallet also revealed that, on average, November had the highest acceptance rate for business loan applications at Lending Club. It’s worth noting that these loans also came with a low-risk premium, translating into lower interest rates. So, after the up and down at year’s end, loan approval rates were higher in the first months of the new year as compared to the holidays and the end of the year.
We Provide Asset-Based Loans At The Commercial Finance Group
Take this content with a grain of salt, because the data looked at an online peer-to-peer lender who takes a slightly different approach to small business lending than we do at The Commercial Finance Group.
Regardless of the time of year, our asset-based loans and working capital solutions at The Commercial Finance Group can be customized to work with your exact business situation. We understand that there’s no such thing as a completely universal loan, and that’s why our asset-based financing services are here to find a unique fit with your business situation. Contact The Commercial Finance Group today with any questions, or visit here to learn more about our asset-based lending solutions.
