More small businesses in New York, New Jersey, Connecticut and Pennsylvania think the coming year will be a good one, with greater ease of getting credit, according to the New York Fed’s biannual Small Business Credit Survey. The central bank polled businesses with fewer than 500 employees.
“Survey results indicate a good credit market for experienced and profitable firms and a generally positive business outlook for the first half of 2014,” the New York Fed said in a statement. “The survey also found that managing uneven cash flows was the top business concern, ranking above access to capital for the first time since 2010, when the survey began.”
They’re optimistic for good reason: Nearly two-thirds of businesses that applied for credit in January were approved. The applicants with the highest approval rate were those seeking loans of $100,000 or more.
“Profitable firms with positive credit history reported much better experiences,” Claire Kramer Mills, a regional and community outreach officer for the New York Fed, said in an interview with Crain’s New York Business. “Most applicants reported needing small amounts of capital – less than $100,000 – but the search costs for loans in those amounts are high.”
Thirty percent of respondents said they plan to hire in the first half of this year, while 29 percent said they likely will apply for credit and about 27 percent are seeking business capital for expansion. Not only do the respondents expect growth in the first half of 2014, but they foresee success, as 58 percent said they predict more revenue than in 2013 and 54 percent believe they’ll see profits.
Small businesses that plan to seek credit this year – whether for hiring or expansion – should look into nontraditional lenders for approval. Companies like National Funding offer borrowers ease of access and more term flexibility.