Credit Starved Small Business

There remains much to be thankful for in the year ahead, personally and for business. The ravenous volatility of 2020 has begun to be less frequent and should continue to diminish in the first two quarters of 2021. For many businesses, getting back to relative normal is of critical importance as they plan out their year ahead. Smaller enterprises continue to be among the hardest hit by the pandemic and will therefore need to better manage their progress into the new year. Still, challenges will remain but will come on the back of the recovery itself.

The Issue With Credit

Over the past year, a unique financial phenomenon has occurred in that there has been a massive narrowing of small business lending throughout the financial sector. This has mostly happened because of early government infusions of cash that targeted smaller companies. The Paycheck Protection Program, among others, created short-term opportunities for companies to weather the storm. But it also did something unexpected. Banks and lenders used this as an opportunity to move away from regular lending to smaller companies.

Banks too have to worry about their business and ensure that they are making necessary adjustments to be able to maintain progress through an unusual circumstance. Because loans and lines of credit cost them money upfront, it is prudent for them to seek out more substantial opportunities from larger lines of credit. Another consequence is that when a smaller business does obtain credit, they will now be paying higher than usual interest as a consequence of the financial market’s consolidation. In some cases, small businesses are opting to offset this adversity by taking on larger loans than they normally would. This is greeted with questionable risk as the market is yet to be totally stable.

The final challenge is the difficulty of obtaining these lines of credit. The amount of red tape is increasing for smaller businesses even when seeking credit from institutions they have an established history with.

Those disregarded most by banking institutions are between $100,000 and $1 million of annual revenue. While the evidence suggests that these are companies most in need and with the best reputation for maintaining positive growth even during adverse circumstances, banks remain less willing to cooperate.

What’s The Solution?

The unfortunate truth for many small businesses is that the answer is not obvious if it exists at all. It is estimated that in the coming year financial institutions will continue to tighten their grip on who they allow in and how that process is evaluated. Depending on the industry that a business operates in, this can be a devastating realization.

The good news for industry distributors is that there remains a significant option. ACS Affiliate Services gives distributors the freedom and opportunity to fulfill any order of any size without the question of asset insecurity. Full-order financing is the cornerstone of ACS. The idea is to maximize the selling capacity of affiliate businesses without all the red tape. It’s not just about confidence in the order, but confidence in the lending institution. ACS strives for companies to protect their personal and business assets to not only ensure business progress but to create scalability. The competitive advantage for the year ahead is going to be reliant on those willing and able to create opportunities. ACS is a partnership that helps to do just that.

We encourage you to learn more. See what ACS Affiliate Services can do for your business and understand how to create success in the year ahead. This is not a one-size-fits-all service, but a partnership.

Across every aspect of business, ACS Affiliate Services can help your vision become a reality.

To learn more about ACS Affiliate Services, please contact Jodi Meyer at This email address is being protected from spambots. You need JavaScript enabled to view it..