Smart Borrower Blog

Archive for the ‘Business Borrowing’ Category

Small Business Loans Increase But Obstacles Remain

Total lending to U.S. small businesses grew again in November, according to the latest Thomson Reuters/PayNet Small Business Lending Index, adding to a positive trend. The Index, a measure of overall small business loan volume, posted an 18 percent increase in November 2011 from November 2010, reaching the highest level since February 2008. This yearly upswing is an indication of: “A new phase of the business cycle,” PayNet’s founder said in a Reuters article . “Businesses are betting on the future with increased investment spending.” Small business owners are also getting better at keeping up with their loans. The Thomson... more »

Small Business Lending Suggests Stronger Economy

U.S. small businesses are borrowing more these days, after having consolidated and tightened up during the recession. Increased borrowing points to a stronger, more solid economic foundation than before the recession, according to PayNet President William Phelan. The Thomson Reuters/PayNet Small Business Lending Index, a measure of the total loan activity to small businesses, grew 20 percent in October marking the 15th straight month of double-digit increases in borrowing. And as lending standards have tighten considerably since the economic crash, it is implied that small businesses have improved their risk profiles. Plus, increased lending shows that businesses are looking more... more »

Small Business Borrowing Slows in September, But Stronger Overall

Matters in the small business arena may not be back to “good” yet, but there are signs of progress, according to recent data on small business loans. The Thomson Reuters/PayNet Small Business Lending Index, a measure of total U.S. small business financing volume, rose 14 percent in September, a more modest pace than the revised 18 percent growth from August. The silver lining is that it still marks the 14th consecutive month of double-digit increases in borrowing among smaller firms. PayNet has tracked small business borrowing for years, and found that the volume of loans shrunk dramatically during 2008 and... more »

Small Business Loans Are Hard To Come By

If you own a small business and are looking for funding you probably will find getting a loan is not an easy task. Forbes reports that since small business bank loans peaked in 2007 reaching nearly 2.5 million, they have dropped drastically by about 39%. As of June of 2011 bank loans made to small businesses had dropped to levels not seen since 1999 and at that time there were almost six million less small businesses throughout the country, compared to today. Why such a decline? The economic downfall is partly to blame, but the Forbes article also points out... more »

Fed Hopes to Lower Interest Rates, But Will It Help?

In order to “support a stronger economy” and keep inflation at the right level, the Federal Reserve decided today to purchase bonds with longer maturities, while selling off its shorter-term bonds, in hopes that long-term interest rates will continue to fall. The Federal Open Market Committee announced that it will buy $400 billion worth of Treasury securities with maturities of six to 30 years, over the next eleven months. It will simultaneously sell off an equal amount of its Treasuries that mature within three years or less. “This program should put downward pressure on longer-term interest rates and help make... more »

Access to Capital Remains a Problem for Small Businesses

In a new survey, small businesses made it clear that getting the loan funding they need is still a major problem in today’s economy. The survey of about 7,502 small businesses with less than $5 million in annual revenues, conducted by Pepperdine University’s Private Capital Markets Project, found that one out of every four owners says that access to capital is their company’s greatest obstacle. Other major concerns include economic uncertainty (one out of five) and taxes and regulations (one out of four.) Credit for these businesses apparently remains tight. Less than half (44.5 percent) of the 1,667 small companies... more »

Lending Standards Eased Slightly Again in Latest Quarter

Banks loosened their lending standards on several types of loans during the past three months, according to the Federal Reserve’s survey of senior loan officers . Those finding the easiest access to loan capital are large and medium-sized businesses, as well as car buyers. In the survey, which polled 55 domestic and 22 foreign banks, 21.8 percent of all banks said that they eased their lending standards for large companies in the third quarter from the second. And 20 percent said they had made it easier for auto loan applicants to get approved. “In spite of the equity market volatility,... more »

Business Lending Standards Ease In Second Quarter

A recent Federal Reserve survey shows that lending for some businesses throughout the country got easier during the second quarter. In a time when lending has been difficult to come by for many businesses seeking credit this is good news. The survey which was conducted by the Federal Reserve received responses from 55 domestic banks during the time frame of July 12th through July 26th. Of the banks surveyed 20% of them confirmed that they had eased lending standards to large and middle size businesses mainly for those that had applied for industrial and commercial loans. The same survey also... more »

Small Banks Using Government Money to Repay Government Loans

Almost of all of the nation’s big banks have repaid the government bailout loans they received under the TARP program. In fact, the Treasury reports that it has loaned out $245 billion under the Capital Purchase Program (CPP), a main component of the TARP plan, and it has now been returned $255 billion in repayments, netting a $10 billion taxpayer profit. And here’s some more good news – a number of small banks are starting to repay their government loans as well. These are U.S. banks who took out smaller loans but have had a harder time earning the money... more »

Kiva Launches MicroLending For U.S. Small Businesses

Kiva.org, an online microlending company has partnered with Visa Inc. and former president Bill Clinton to implement its international lending model to help U.S. small business owners. Kiva began in 2005 and has helped small-time entrepreneurs get funding for their businesses by connecting them with lenders who pool their resources for the loans, sometimes contributing as little as $25 a piece. The loans are typically about $7,000 or less, a very manageable sum for a community of lenders to contribute. And for some small businesses that amount is the difference between success and failure. “In this economy where lending has... more »