Report Shows Trouble Loomed in ’08 Small Biz Financing
Jun 1st, 2009 | By Dawn R. Rivers | Category: ResearchThe SBA Office of Advocacy released its annual report on small and microbusiness lending last week, for the data year encompassing June 2007 to June 2008. As the economy slowed through the second half of the period, small business lending overall slowed significantly. Dollar volume was up by 4%, or $26.7 billion, but that was only about half the increase from the previous year, when outstanding small business loans increased by more than $50 billion or 8%. The report also found that so-called microbusiness loan (under $100,000) dollar volume increased by a relatively robust 6.8% and the number of those loans grew by an unambiguously robust 15.7%. Both are attributed in the report to continued efforts on the part of banks to promote small business credit cards.
It is interesting to note that this report also find that, while the dollar volume for small business loans (between $100,000 and $1 million) increased slightly, up 3.2%, the number of loans outstanding fell by 23.3%, down from 2.9 million to 2.2 million. According to Advocacy’s Quarterly Indicators, loan demand was up substantially at the beginning of this period, while credit standards had begun tightening. By the end of the data period, small business loan demand had dropped off considerably possibly due to increased tightening of credit standards. No doubt the decline in demand and the tightening of the credit markets accounts for the changes in small business loan volume. For state-by-state listing of the top lenders in both the small and microbusiness loan categories, visit the SBA Office of Advocacy web site at http://www.sba.gov/advo/.
