Is The Lending Environment Improving?

The Lending Forecast

With all of the economic uncertainty in the business world, is it in fact possible to make a determination on the stability of the markets? Some recent surveys and studies have found small business lending corresponding with an easing of credit restrictions, with a few exceptions.

One prominent leasing index showed a prominent jump between September and November of 2012. Measuring the number of new loans and leases to small businesses, the index now stands at 108.3, up from 94.1 in September. Mid-2009 saw the all time low at 65. The index reflects loan information from more than 200 US lenders.  While bumps in the road are projected, it is widely agreed that lending to small businesses will continue on an upward trajectory throughout the coming year.

Another recent survey from October 2012 also demonstrates a slight easing of credit standards for small business applicants. A little over 9% of respondents said that they had eased their credit restrictions over the last three years, and only about 1% said that they had actually tightened down requirements. The December Biz2Credit Small Business Loan Index, which evaluates loan applications on Biz2Credit.com, surveyed more than 1000 applicants, with approval rates seeing a jump of almost 13% over the last two months of 2012.  Approval rates at smaller banks grew as well, albeit at a much smaller rate.

 

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LeaseQ predicts that leasing options will become increasingly attractive options for small business in the coming year. 

 

Not all the news is good, however, with approval for small business loans from credit unions dropping slightly, the seventh consecutive monthly drop in a row.. Approvals by alternative lenders also showed a mild drop, which has been attributed to the sudden rise in loan application approvals from larger, more established banking institutions.

Another survey frm the National Venture Capital Association and Dow Jones Venture Source examined the outlooks of CEO’s and venture capitalists.  For the most part, the survey is an optimistic one, with more than four out of five CEOs expecting to boost their employment rosters in 2013, and 51% expect to see an increase in corporate technology spending.

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What To Expect

On the downside, only 49% of CEOs expect that the economy will demonstrate any meaningful growth or improvement in 2013, and 38% forecast  strong chance of a government budget overhaul.

“The potential for growth is palpable, with positive forecasts for startup jobs, technology innovation, and global activity,” says NVCA president Mark Heesen. “But to realize this promise we must get on the right track in Washington, and quickly.”

LeaseQ serves the business community with commercial equipment financing and leasing options. They are designed to work for small business startups as well as Fortune 500 corporations.

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