In 2015, C2FO survey revealed that 60% of small and medium sized business respondents received financing at rates below 8%.  In 2016, that amount dropped to 48%.  With the 2008 regulations in response to Wall Street’s credit failures, banks are now less interested in loaning to small businesses due to the costs and risks associated with it.  According to the Bloomberg article, borrowing is priciest “in the U.K. and the U.S. with 42 percent and 47 percent of SMEs borrowing at a rate of below 8 percent, respectively. That compares with 52 of respondents in France, 51 percent in Germany, and 58 percent in Italy.”

Peer-to-peer and alternative lending options have increased dramatically over the last few years, offering additional options to small businesses (at more expensive rates).  Small businesses need credit lending to grow and expand.  Unfortunately, due to the economic situation and banks still fearing credit lending on perceived risky ventures, small businesses will continue to get the short (expensive) end of the stick.  A declining economy is bad, but sometimes an uncertain one hits just as hard.