Financing For Millennials
Millennial’s are taking over the country. By 2013, the Millennial population, which is considered American’s born between 1980 and 2000, represented a third of the total population. By 2014, one in three employees was a Millennial, so by 2050, Millennials are expected to make up half of the global workforce. Not only are they the largest population in the United States today, but they are also the most ethnically diverse and technology savvy generation that America has ever seen. Since the Millennial generation was also born into a time where terrorism, 9/11, and endless recessions were at its peak, the Millennial generation has been shaped into one that many people, well, simply do not understand.
Everybody has heard, or said, many of the Millennial stereotypes that older generations have used to describe this intriguing generation. “Millennial’s are too entitled and lazy”, “Millennial’s are compulsive job hoppers”, “They are too immersed in technology and social media”, “Millennial’s have terrible work ethic and would rather play than work hard” – the list goes on and on. Many older generations that started these stereotypes fail to realize that in reality, they just do not understand the current generation because they are shaped by different societal, life, and economic factors than previous generations. No matter your personal opinion on Millennials, the reality is that they are a dominate force in the world today and are only continuing to become more and more vital to society and the workplace. They are here to stay, so understanding the quirks and differences of this generation is essential.
Millennials Reshaping the Workforce
To help combat many Millennial workforce stereotypes, Bentley University put together a study to determine the real implications that this generation will have on the workforce. The major takeaways from the study include:
- 51 percent of Millennial’s actually prefer to communicate with their colleagues or boss in person, showing that not all Millennials are “incapable of communicating” as most stereotypes claim.
- For Millennials (about 77 percent), having flexible work hours, healthcare benefits, and hands on, personal training from managers are key benefits they look for in jobs. The stereotype is true – Millennial’s do value having meaningful life experiences outside of work. But why is this a bad thing when most Millennials still understand the true value of hard work and making money? I mean, they did grow up in one of the worst recessions since the Great Depression.
- Millennials are not job hoppers! According to the study, 80 percent of Millennials believe they will stay with four or fewer companies in their careers; 36 percent of Millennials expect to stay for 3 to 5 years; and 16 percent of Millennials expect to stay with their current job for the rest of their career.
- Millennials want to work for companies that truly believe in making a major societal (or environmental) impact.
All in all, Millennials are a bit entitled and do believe they are special, but this has led to one of the most innovative, technologically savvy, and ambitious generation yet. Millennials are a force to be reckoned with, and are continuously shifting the workforce. Through this unique generation, the United States is seeing more innovative startups than ever before that are pushing the boundaries of how work is done. Since many incumbent businesses have been slow to adjust to the needs of Millennials and do not allow them to have a well-balanced work and play lifestyle, Millennials have found alternative routes to cater to their preferred lifestyles – Millennial owned businesses.
Millennial Owned Businesses
A new term has been coined to define the Millennial workforce – “Millennipreneurs”. According to studies conducted from the 2016 BNP Pariabas Global Entrepreneur Report, Millennials are starting more companies, managing bigger staffs, and accumulating higher profits than Baby Boomers did. The study shows that while Baby Boomers were becoming entrepreneurial and creating businesses at around the age of 35, “Millennipreneurs” are starting businesses around the age of 27. The age of entrepreneurs throughout previous generations has progressively gotten younger, but Millennials have shown that being older does not mean more success.
The largest factor that has allowed many Millennial owned businesses to succeed is – que stereotype – their dependence and integral knowledge of technology. Technology has undeniably become one of the most vital business practices for every single industry. Through innovative technological practices, Millennials are able to cater to consumer needs, create more efficient workplace systems, and easily find ways to balance their work and play lifestyle. Thanks to Millennials, more small businesses are being created at faster rates than ever seen before – and we all know how vital startups and small businesses are to the United States economy.
Millennials, flaws and all, are still one of the biggest activist generations yet when it comes to social and environmental responsibility. “Millennipreneurs” have found that by starting their own businesses, they have the ability to make social and environmental responsibility a priority from the start. For Baby Boomers, social responsibility became important only after creating a successful and profitable business. For Millennials, helping people regardless of the amount of money they have is an important business practice.
Why Aren’t More Millennials Starting Businesses?
Startups, small businesses, new business models that are created, and unique competition are important for economic growth, and many Millennials (around 66 percent per the Bentley University study) want to be innovative entrepreneurs today; but unfortunately, too many of them are struggling with overwhelmingly high amounts of school debt. In addition to student debt, many Millennials are terrified about not having a solid retirement plan put in place, especially after seeing what the Great Recession did to their parent’s retirement plans. The drastic effects of the 2008 recession has left too many Millennials worried about the future, resulting in more of them settling for jobs that offer competitive retirement and healthcare plans. While this is great news for businesses looking to add more of this important generation to their workforce, this will cause problems for the small business economy in the future. Luckily, the Small Business Administration, as well as the government, as made huge strides in supporting and encouraging Millennial owned businesses. Americans today are starting to realize the necessary role that Millennials are playing in society, the economy, and the workforce – and continuing to do so is essential to the country.
|Bank||6-10%||3-7 years||14-30 days|
|SBA||6-10%||3-7 years||10-30 days|
|Line of Credit||5-15%||1 – 3 years||7-30 days|
|Alternative||6-25%||1-5 years||5-7 days|
|Cash Advance||1.16-1.55||3-24 months||1-3 days|
Bank Loans For Millennial Entrepreneurs
If the Millennial business owner has an established business with good profitability, and the business owner has good credit, then a bank loan is usually the best form of financing. With low rates and long terms, bank lenders and credit unions are able to provide affordable financing that will help as the business scales.
SBA Loans For Millennials
If the Millennial business owner has tried to obtain a conventional bank loan but was unable to get approved, the next best option is to seek SBA financing. SBA loans are perfect for Millennials that have good credit and revenues, but the lender found their application to be borderline, because the SBA reduces the lender’s risk by agreeing to cover a majority of their losses should the millennial-owned business fail to repay their loan.
Alternative Lending For Millennial-Owned Businesses
Alternative loans use new technology to analyze credit applications and underwrite their loans, which helps speed up the approval and funding process. An alternative fintech loan can fund in as quickly as a couple of days (as opposed to the months you may have to wait for a bank loan to complete). But with fast funding comes higher rates and shorter terms.
Merchant cash advances are far from the healthiest funding option. With that having been said, if you need cash immediately and with ease, this is just about the only funding option for business owners with poor credit or company’s that have been established for a short period of time.