In today’s hostile economic environment, accessibility investment is the primary differentiating factor between those companies which have been able to flourish and gain business versus those that have experienced enormous drops in revenue. The reason many organizations have seen their sales and income drop dramatically, many to the point of closing their doors, while many large U.S. corporations have managed to increase sales, open new retail operations, and grow earnings per share is that your small enterprise almost always relies exclusively on traditional professional bank financing, such as SBA financial loans and unsecured collections of credit score, while large publicly traded corporations have accessibility to public markets, such as the stock exchange or bond market, for accessibility investment.
Prior to the onset of the financial crises of 2008 and the ensuing Great Recession, many of the largest U.S. professional banks were engaging in an fast money policy and openly lending to companies, whose entrepreneurs had a favorable credit score scores and some industry experience. Many of these plans consisted of unsecured professional collections of credit score and installment financial loans that required no collateral. Cash advance financial loans were almost always exclusively backed by a personal guaranty from the entrepreneur. This is why good personal credit score was all that was required to virtually guarantee an organization loan approval. During this period, thousands of small business development center used these plans and collections of credit score to connect to the main city they needed to fund funds needs that included payroll expenses, equipment purchases, maintenance, repairs, marketing, tax obligations, and expansion opportunities. Quick accessibility these investment resources allowed many organizations to flourish and to manage income needs as they arose. Yet, many entrepreneurs grew overly optimistic and many made aggressive growth forecasts and took on increasingly risky bets.
As a result, many ambitious entrepreneurs began to flourish their company operations and borrowed heavily from small enterprise financial loans and collections of credit score, with the anticipation of being able to pay back these heavy debt loads through future growth and increased profits. As long as banks maintained this ‘easy money’ policy, resource principles ongoing to rise, consumers ongoing to spend, and entrepreneurs ongoing to flourish through the use of increased leverage. But, eventually, this party, would come to an abrupt ending.When the economic crisis of 2008 began with the sudden collapse of Lehman Brothers, one of the oldest and most renowned banking institutions on Wall Street, a financial panic and contagion spread throughout the money score markets. The ensuing freeze of the money score markets caused the gears of the U.S. economic climate to come to a grinding halt. Banks stopped lending overnight and the sudden lack of fast money which had caused resource principles, especially home prices, to increase in recent years, now cause those very same resource principles to plummet. As resource principles imploded, professional bank balance sheets deteriorated and stock values collapsed. The days of fast money had ended. The party was officially over.