According to a survey of U.S. bank risk managers conducted by PRIMA (the Professional Risk Manager’s Association), future of small business lending is looking rather rosy.
Risk managers appear hopeful when it comes to lending opportunities for small businesses over the next six months:
- 89% believe that approval rates for small business loans will increase or hold steady
- 90% believe the amount of credit extended to small businesses will increase or hold steady
These numbers have improved since last quarter, reflecting an overall confidence in not only the economy and state of lending, but small business prospects in general. Increased credit and loans will create more options, lower interest rates and open up opportunity for entrepreneurs to start and grow new businesses.
But will small businesses actually be seeking greater credit? And will there be enough capital to satisfy that demand? On these points, bank risk managers also remain positive:
- 70% believe small businesses will request more credit
Risk managers also appear to believe small businesses will actually grow enough to pay back their loans:
- 79% believe small business delinquency rates will remain flat or decline
These survey results offer hope for small businesses looking to join the slow but promising economic recovery occurring since the recession in 2009.
Quick Tip: Loan opportunities may be increasing, but remember that just because your small business can get a loan doesn’t mean you should. Carefully weigh the pros and cons of bootstrapping versus taking out a loan. Consider asking friends and family before turning to a bank loan, since you can often secure a family loan interest free. If you’re ready to take on a larger business loan, be sure to read up on the details of applying for a loan before proceeding.
Article by Rochelle Bailis