A growing trend among traditional lenders.
After the 2009 Recession, banks pulled back to “safer” forms of lending, which to them means loans backed by collateral. A piece of real estate or heavy equipment can get you loans with rates as a low as single digits. Unfortunately, these options disappear if you lack the proper collateral or don’t have excellent credit to guarantee the loan. And the truth is that more and more businesses today are asset-light; meaning they don’t operate with a lot of collateral. Think of your modern day consulting firms, business services, ecommerce, etc all lack the collateral of old school manufacturers, brick and mortar retailers, and other more traditional businesses.