Government guaranteed programs are below last year’s levels. Small business lending is low after expiration of special loan incentives, higher guarantees and also fee waivers. Though there are new initiatives to revive business optimism and increase small business loans, but somewhere it is falling back.
During the last six months of fiscal year 2011 that ended on March 2012, it has been found that 25 lenders originated 272 loans that totaled $ 44.03 million under SBA’s primary 7(a) program in Buffalo and Rochester areas. Though this is quite fair amount, but yet it is down by 43 percent for 439 loans amounting to $77.05 million.
Small businesses are showing lackluster confidence and there is fall in loan demand too. Slow pace of economic recovery is to be blamed for it. Though consumer demand is growing but small firms are just not willing to invest or take on debts. Small-business optimism remained inconsistent, rising in a few months and falling in others.
Some findings reveal that borrowing improved in upstate like Western New York but yet confidence has not returned back as it was during pre-recession days. The national optimism index too did not show impressive gains as plans of businesses to expand and hire are not robust. There has been significant job growth in March but now it has fallen again. So, there is a constant dip-rise phenomena and looming uncertainties. Businesses are either funding their growth or sitting back waiting.
National Federation of Independent Business (NFIB) report suggests that more than half of business owners are saying that they don’t need credit as all of their needs are met. SBA officials are saying that lending activity is down from a year ago, but is back at levels when the financial crisis just began.
Overlooking all other facets, what really is impressive is the pace of SBA loan-making. It is absolutely a good sign for the economy and credit market is just another foundation to deliver financing to small businesses that are trying to create jobs and expand the economy.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org