The decline of bank lending to small businesses has created an opening for alternative lenders that provide capital to small businesses. Those alternative lenders are attracting investor money. Small businesses used to be able to rely on increased credit card lines, business lines and equity lines of credit, which are not readily available these days.
“Banks don’t have the resources to make a small loan; it doesn’t make sense for them,” says Rob Glanville, managing director at private equity firm Pine Brook Partners. Pine Brook is one of the investors that see an opportunity in the space vacated by small banks.