Improving Small Business Loan Statistics May Be Deceptive
While news of the recovering economy and increasing small business loan volume should be a cause for celebration, many small business owners aren’t feeling the sense of relief that others are reporting on. The Huffington Post recently pointed to statistics that paint a slightly different, yet importantly distinct picture. Business loans have gone up, but mostly to larger, more established businesses, while volume for medium and smaller businesses has actually gone down. Big banks are moving progressively farther away from small business lending, or are focusing on businesses that, while technically included in the category of SMBs, are towards the larger end of the spectrum and considered to be safer bets. Small business owners often don’t have traction with banks that have higher standards for approval than many of them are able to meet. Bad credit is a major issue on the part of small business owners looking for capital, but other issues that can stop them from getting approvals include being in industries that are considered to be high risk, not being old enough, not having a strong enough business plan, or financial blemishes such as past bankruptcy. Business owners can still find ways to obtain capital, but when even the SBA is decreasing their lending activities, it can be a disheartening process.
Photo Credit to Lori L. Stalteri on Flickr