There is improving trend of small businesses finding access to credit. The latest evidence of this is provided by ‘Greenwich Associates’ that conducts market research for major banks. Its survey has found that 59 percent small businesses have applied for a loan in the last 12 months and demand has grown in every single quarter.
It is found in the survey that five percent of companies have applied for loans during the third quarter of 2010. This figure has leaped 29 percent during the first three months of 2011. This is contrary to loan demand trend as demand for loans normally is highest at the end of a year. This is why the jump in the number of applicants during the first months of 2011 is especially notable.
Above all, among the small businesses that have applied for loans, 57 percent got approval from banks. Greenwich has indicted that its survey of small business loans conclude that the lending market for small businesses is returning back to normalcy.
One striking finding of Greenwich Associates report is that majority of small businesses deprived from loans are by big banks. So, small business market remains concentrated at the hands of just few national banks. The recent survey also reveals that half of small and mid sized businesses found credit from lenders that are not top lending institutions in the US.
Greenwich consultant Duncan Banfield, says, “The balance sheet issues and capital requirements, and the uncertainty of the economy, caused banks to restrict credit, or even wean some of these businesses off.”
During the survey, 271 small businesses were polled and the methodology is based on interviewing over phone nationwide. Now, on the basis of the survey report, Banfield says that banks are in a position to recapture some market share that they have surrendered. There can be no doubt in the fact that clients value trust and would choose a bank that takes interest in their business. Banks that can demonstrate this can win back businesses.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to