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Want A Recession-Proof Industry? Consider Alternative Finance

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Want A Recession-Proof Industry? Consider Alternative Finance

​​​​​​It’s a dog-eat-dog world -- even more so in the toughest economy since World War II. Even “safe” industries like education aren’t providing income security given the pace of change and technological disruptions. Thanks to Covid, U.S. colleges will lose $183 billion in 2020 and 2021, and 5% of Americans without a college degree have lost a job in the past year. A good segue would be, that’s why x number or % of people are looking for a business that they can run online

Recession-proof businesses

So the question is: What’s a recession-proof industry where a professional or entrepreneur can thrive even under the direst conditions like we are going through now? According to March 2021 LinkedIn data, the strongest industries are currently software and IT services (8.5% gains in year-over-year hiring), transportation and logistics (5.9%) and wellness and fitness (5.8%) and financial services growing at 3% gains in hiring from a year ago. Despite the economic uncertainty, big banks like JPMorgan closed out 2020 with record-breaking profit of $12.1 billion. My industry, alternative lending, is seeing even stronger demand for loans and funding  for small-to medium-size businesses and startups. Most of the funding options take into consideration that the business might have lost their revenue and might not have the credit requirements that the big banks look for. Also the start up funding is not even offered through the big banks.

Another reason that Alternative lending is thriving because over two-thirds of loan applications by small businesses are declined by traditional banks during normal times, and they slow down during a recession. An economic slump gives business loan brokers an opportunity to help struggling entrepreneurs and job creators.

Covid and cash crunch

According to a 2021 Guidant Financial survey, loss of revenue (23%) is Covid’s most common impact followed by reduced budget (11%) and temporary closure (11%). Additionally, the top non-pandemic challenge is lack of capital/cash flow (23%). Many promising startups across industries can become a robust for-profit venture as long as founders can access capital to tide them over.

Aside from being a recession-proof business, selling money is more attractive than other, less essential products since Americans are tightening their belts and being more conservative with cash. Many small- and medium-size enterprises are receptive to loan brokers as financial products at this time can help a venture survive. 

These firms are founded by strong-willed entrepreneurs who have pursued their passion. In cases where an owner is selling plenty of inventory, it can make sense to fund inventory purchases as long as the product has healthy profit margins. Because near-term sales will pay for the bridge loan.

Suited for WFH professionals and entrepreneurs

Alternative lending is built for work-from-home (WFH) professionals so long as you have good communication and business development skills. It’s possible to create an online operation with significant and multiple income streams.

But loans aren’t for everyone. 

Being on the wrong side of the balance sheet can be problematic: 5.5% of homeowners, or 2.7 million Americans, aren’t paying their mortgage. Here’s ex-Goldman Sachs trader Anton Kreil making a compelling argument as to why a mortgage is actually a debt trap. (Starts at 1:44.) 

One of the architects of the Federal Reserve System, J.P. Morgan, told Congress in 1912 that “Gold is money; everything else is credit.” And this chart depicts the extreme devaluation of the U.S. dollar compared to gold, which means Americans can’t buy nearly as much as they need to.

Unfortunately, the Fed’s historic multi-trillion-dollar stimulus has led economists to say that high inflation is on the horizon.

It’s critical to accept that macroeconomic forces are beyond any person’s control. For entrepreneurs who have developed high-quality products and services, they can serve the marketplace as long as they access working capital to order inventory, pay bills and make payroll. Business lending is a powerful service that helps America’s job creators do what they do best.

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Author Bio:

Oz Konar, Founder of Business Lending Blueprint, has built an eight-figure business in the business loan brokerage industry and helped thousands of ordinary people generate millions of dollars in revenue through their own businesses and gain financial literacy through his coaching programs.

Photo Via Unsplash

 

 

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