How to Turn Around Lending: Sales

Guest Writer
Owner of Make a Living Writing
min read
Opinions expressed by Entrepreneur contributors are their own.
sales-lending.jpgWe all know that banks aren't lending like they used to, and the outlook for 2010 doesn't seem to offer much hope. One southern business journal recently called the small-business lending climate "dire."  While SBA-backed loan volume accelerated in the third quarter last year, so did default rates. The Wall Street Journal called the outlook "bleak." 

But there's been less talk about why lending continues to flounder, despite President Barack Obama's December appeal to banks to up their small-business lending and call for more legislation to assist the sector. In talking with many bankers myself over the past few months for articles I'm writing, I've heard one reason stated repeatedly for turning down loan applications.

It's sales. They suck.

Banks are turning down small businesses for loans because they can't demonstrate they have the sales to support loan repayment. It's as simple as that.

As the National Federation of Independent Business recently reported, sales remain in the tank and are still sinking for many small businesses. In NFIB's most recent monthly survey, members reported actual sales stood at an all-time low unmatched since 1986, falling substantially short of what owners had expected. And sales are still sinking--more than 30 percent of members said sales were lower in the previous quarter than in the quarter before.

It's time to take a serious look at new strategies you can try to get more sales. Discover Small Business Watch reports that finding more sales is the single biggest issue business owners say they are facing today. 

What haven't you tried yet that might bring you more sales? 

Have you hired commission-only sales people? Optimized your website to improve your natural search results? Reviewed your marketing to evaluate its effectiveness and increased your efforts with what's working best? Tried freemiums, contests or other attention-getters to draw new customers?

If you don't have a long-term plan for increasing sales, set some goals. Where would you like to see your sales in six months, and how are you going to get there?

Taking care of the sales problem will take care of the loan problem. And given the speed at which our government is moving to help small businesses through the downturn, ramping up your sales may work faster than federal relief.

More from Entrepreneur

Kathleen, Founder and CEO of Grayce & Co, a media and marketing consultancy, can help you develop a brand strategy, build marketing campaigns and learn how to balance work and life.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.