A report of US Small Business Administration has found that small businesses continue to postpone borrowing in 2011.
In the SBA report, it is found that lending and borrowing phenomena changed in the US and it is no longer impressive. As lending by financial institutions declined, borrowing too is on a halt. Small businesses are constantly postponing borrowing even when financiers are willing to lend.
Credit availability is absolutely essential for small business growth and survival. Office of Advocacy examines the state of lending environment of financiers. Some key aspects that are being found are:
- Banks having over $50 billion in assets have led to 51 percent decline in small business loans.
- Borrowing trend of small businesses decreased for commercial and industrial loans under $1 million. Microloans less than $100,000 fell by 12.7 percent in 2011.
- Small business lending under $1 million did not really remain lavish in 2011. However, business loans for $1 million or more increased. Small business outstanding is valued at $606.9 billion while in 2010 it remained $652.2 billion.
Small businesses are not getting the confidence to borrow loans as they find the credit market to be vulnerable to losses and high interests. Also, lenders are not giving out extended lines of credit when it comes to borrowing loans.
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 email@example.com.