5 Small Business Financing Trends To Look Forward In 2017

Financing holds supreme importance while launching or expanding any business. And with more than 61% of small businesses accepting to have faced some type of financial challenge in the past year (as per the 2016 Small Business Credit Survey Report), it becomes inescapable for everyone, including the newbies to the pros in small business, to be more watchful while making any type of financing decisions. In order to make sound and profitable financing decisions, it is important that you keep an eagle’s eye on the financing trends for the year 2017 to succeed in any business venture. That said; here are the 5 small business financing trends to look forward in 2017.

Trump Of Crowdfunding

Crowdfunding skyrocketed in the year 2016 and according to finance experts, this trend will continue to reign in 2017 as well. Michael Banks, the founder of FortunateInvestor.com, says, “Crowdfunding will continue to be an invaluable resource for entrepreneurs. Crowdfunding platforms allow entrepreneurs to easily validate and fund a new product or service all while growing their customer base.” With various websites like Kickstarter, Indigogo, and GoFundMe gaining popularity, small businesses would incline more towards crowdfunding to collect their financing from everyday people.

New trends in crowdfunding like virtual reality, voice-user interface, wireless audio and gamified content would come up in 2017 that would also impact the way entrepreneurs and small businesses use crowdfunding in this year. The pitch would have to be more detailed and engaging with all the latest trends to target the right audience and get more finances from the commoners.

Rise Of Alternate Online Lenders

The fintech industry aka financial technology industry’s online lending sector exploded in 2016 with a record number of finances made to small businesses as well as entrepreneurs. The growth of the online lending sector is not going to slow down any bit in the current year. Small businesses are increasingly getting attracted to these alternative online lenders because of the ease and faster money lending options as opposed to the lengthy and complicated traditional banking loan finances. The instantaneous online form filling process that receives an approval or disapproval within hours is sure to drive more small businesses towards the rising alternate online lenders.Learning how to apply for a small business loan online will speed up the process without the hassle.

Banks To Ease Lower-Dollar Lending

Lower-dollar lending would be embraced yet again by the banks in 2017. The Small Business Administration or SBA raised the funding cap in the past few years; thus influencing the banks to raise their lending amount and give bigger loans to businesses with a good past financial track record. While credit score would still remain a priority, in 2017 banks would approve lower finances as a result of the threat posed by the alternate online lenders. Over 85% of small businesses require less than $100,000 finance for their small business and banks, that were reluctant to give credit less than $350,000 until the last year, would be seen offering the same this year. Moreover, these banks would also turn towards a more online and automated mode to gain a competitive edge over the online lenders.

Rollover as Business Startup (ROBS)

Baby boomers (those presently aged between 53 and 71) are on the rise and 2017 would see a number of baby boomers retiring from their respective jobs. With high retirement amounts or retirement savings, these baby boomers will be seen investing their money in financing the small businesses. This strategy of funding another’s business is called Rollover as Business Startup and it even saves the money lenders or baby boomers from high taxation. Small businesses are more and more turning towards this Rollover as Business Startup strategy as it offers them a loan at lower interest rates without asking for rigid financial track records.

Bootstrap Funding

Bootstrapping is one of the oldest and simplest forms of funding for any and every small business. There are no hidden costs, no interest rates, no complex procedures and no brainstorming conditions in bootstrap funding. While earlier not everyone was able to get their personal funding for their small businesses or startups, times have changed now and 2017 would be the year when an increasing shift would be seen towards bootstrap funding. People will be seen probing their own pockets for capital and would also turn towards trade credit or factoring to get their business going strong in 2017.

As per the top business finance consultants these 5, i.e., crowdfunding, alternate lending, retirement funding, lower bank lending amounts and bootstrapping, would be the five main trends that you should keep in mind while looking for financing options for your small business in 2017. These trends would help you secure quick and easy finances for your small business; so keep a watchful eye on them and have great success in your business financing.

Author Bio

Ankit Gupta handles the content team for ExportersIndia.com, a leading buyers and sellers business marketplace based in India. Owing to the passion for his profession, Ankit has a knack of sharing his valuable insights with small businesses and budding entrepreneurs to keep them updated with the latest business news and trends. To know more about Ankit, you can follow him on his Google+, LinkedIn and Twitter handles.