Although small business lending may be on the rise, the loans themselves have decreased in size. According to new government data, the total number of small business loans increased by 10.4 percent in 2012, and monthly lending volume jumped to 23.5 million in June 2012, up from 21.3 million in June 2011.
During that same year period, however, the total value of outstanding small business loans under $1 million fell by 3.1 percent. The 3.1 percent drop reflects a trend that has continued since 2008, when the total value of outstanding small business loans topped out at $711.5 billion. Today, that number is down to $587.8 billion, revealing that lenders are stills hesitant to hand out loans in an uncertain economy, and that some companies are still trying to recover from the financial crisis.
“Banks are trying to clean out and fix their balance sheets,” says Michael Carrazza, chairman of Patriot National Bancorp Inc., a community bank in Stamford, CT. “The standard to have a loan approved is higher.”
Getting a small business loan has long been a challenge since the recession, so the fact that more merchants are getting the cash they need, even if it falls short of their initial request, is still good news. Because banks have tightened lending standards, however, it is still difficult for many small business owners to get a loan, particularly if they need extra financing to stay afloat. These tightened standards continue to make it hard for some companies to stay in business.
If a small business owner is looking for extra financing, they can come to National Funding for assistance. National Funding can help a small business owner get a merchant cash advance to help with company operations and everyday expenses.
