Monday, October 30, 2006

Federal Reserve - Small Businesses Turn to Alternative Financing

A recent study released by the Federal Reserve on the borrowing activities of small business concludes that more small businesses (less than 500 employees) are seeking financing and other credit products from financial institutions other than banks. Given that the study is based upon newly available data from the Federal Reserve's 2003 study of small business finance, I'm not sure that the conclusions are earth shattering.

In the last few months, I've written about how factoring has grown to a $1 trillion industry and how credit unions are offering new products and a focus on relationships.

Am I surprised about the conclusions? No. But it does confirm a trend that shows few if any signs of reversing.

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