Businesses have always needed funding, whether it’s a family-run shop on Main Street, an innovative startup, property flippers, or someone with a big vision waiting for the capital so they can greenlight their large project. Yet over the past 15 years or so, business finance has undergone some major transformations.
The Great Recession
Back around 2007, a bubble burst. Big financial institutions, their affiliates, lenders, and borrowers alike experienced an economic crash unlike anything witnessed in generations. Businesses and commercial real estate investors were scrambling to find capital that would keep them afloat, allow them to deliver customer orders, and employ their staff. Traditional lenders responded by immediately tightening their credit and collateral requirements, which ended up pushing new and small businesses – and even some established corporations – to the sidelines.
Where were they going to find financing to sustain operations?
When the economy turned around, how were they going to grow?
The New Rise of Commercial Finance
After the Great Recession, traditional lending channels were already deploying prohibitive requirements that kept small businesses and real estate investors from getting a seat at the table. The commercial finance industry saw a need and answered the call. With nearly no limitations, independent financing firms, like Prime Commercial Lending, were able to help businesses and property investors get the funding they needed with low rates, more generous terms, and higher funding amounts than they could get from banks and similar lending institutions. Because of this, businesses got a second chance, and new entrepreneurs were able to get the financing they needed without facing a string of turndowns.
A little over a decade after the Great Recession, the economy took a big hit from something no one could have predicted – the COVID pandemic. Suddenly, businesses were downsizing and shuttering their operations. Supply lines were strained. E-commerce was on the rise and what were once brick-and-mortar businesses were taking things online to meet the needs of their customers. What was lacking was a reliable source of funding to help these businesses thrive and grow in the face of adversity.
The commercial finance industry once again saw a need, and provided the capital needed to keep businesses on track and people employed. From helping small businesses to providing real estate investors with the capital necessary to renovate and build new facilities so they could accommodate the great migration or to fall in line with CDC guidance, to keeping the freight industry moving to supply stores and businesses with the goods they needed, to embracing the rise of e-commerce and the new paradigm shift that served B2B, B2C, and even government agencies in the pandemic era – it was the commercial finance sector that saw the largest engagement.
Where We Are and Looking Ahead
Commercial finance has grown a lot since the Great Recession. In addition to helping businesses and commercial real estate investors, the commercial finance industry has expanded to help visionaries who couldn’t get the funding they needed from traditional lenders because of internal limitations. Prime Commercial Lending has introduced our Large Balance Financing program that greenlights big projects up to $5 billion and beyond that would never see the light of day due to funding restrictions from traditional lending channels.
The commercial finance industry is always at the forefront of change. From helping small businesses to unexpected disruptions that upend how everyone does business to e-commerce and making big dreams a reality, Prime Commercial Lending has the capital reserves and foresight to keep our economy moving. To learn more, reach out to Prime Commercial Lending today.