Present Status of Small Business Lending

Federal Reserve Bank of San Francisco (FRBSF) states in its Economic Letter written in mid October this year that most banks have cut down on their small business loans by $ 4.7 billion since the pre-recession peak in 2007. Funding to small business is still on downward track, where as the medium size companies are availing the facility with more ease.

As compared to the previous trends of planning to grow the business by utilizing the loans, the small businesses are now more inclined towards the expansion of their business based on the loans. Small business are seekingloans from trade credit, personal credit cards or from home equity loans rather than the banks for the reason that the banks are laying more and more strict conditions for the loans for the small businesses.

Despite the trend of not sanctioning loans to small businesses is still prevailing and from 2008 to 2011 thebusiness loan to small businesses has fallen by almost 10 to 12 percent, the slide is likely to slow down considerably by the end of this year.

Financial institution and small banks are now coming forward to provide loans to small business enterprises. The trend of low lending is now stabilizing. We The Merchant Advisors are a leading financial institution and providing loans to small businesses for the last 20 years. You can always turn to us for a small business loan.