ABA Banking Journal - March 2011 - (Page 40)

surveys & trends    |   by michael mazur Small-biz finance: mixed results While the economy continues to mend, one sector pertinent to its growth continues to show mixed signals. Small businesses depend Economic conditions are improving on a variety of factors in order to succeed including location and type of industry. Because of this, banks have either been more open to financing small businesses or not. Planning to increase staff Some recently completed surveys spell out these contradictions and the challenges the small business banking customer is experiencing Harder to get credit than a when it comes to obtaining credit. year ago According to a one recent indica*results from different groups of surveyed businesses tor, small business owners appear to have rebounded in confidence due to improvements in the economy. Discover Financial Services reported in its Discover Small Business Watch Small businesses that did obtain that the confidence index rose in January to its highest point in three years. credit seemed to do so through comDiscover found that the small businesses polled have a favorable economic munity and regional banks more than outlook for the first half of 2011 with 31% believing that economic condibigger players. In its Third-Quartions for their businesses are improving, a rise from 25% just a month earlier. ter Small Business Survey, the FedAdding to the more positive business outlook, a Wells Fargo/Gallup Small eral Reserve notes that these banks Business Index Survey conducted late last year found that over half (57%) of approved more credit applications than small business owners surveyed said they planned to make changes in 2011 nationwide banks. with 43% saying they would expand their business operations. The Wells Finally, when asked about delinFargo/Gallup findings also noted that 18% planned on increasing their staffs quencies and charge-offs in 2011, a in 2011, an increase from 13% in the third quarter of 2010. majority of banks in the Fed’s “Senior Still, when it comes to credit many businesses are not quite as optimistic. Loan Officer Opinion Survey on A recent Greenwich Market Pulse survey by Greenwich Associates highlights Bank Lending Practices” said they that two-thirds of small businesses believe that banks are not meeting their expected an improvement in the credit needs. In fact, half of the 221 small businesses polled for the January quality of C&I loans. Approximately Greenwich Market Pulse stated that it is harder for them to get credit than it 70% of those polled believed there was a year ago, when economic conditions were worse. would be improvements in C&I loans Also, continuing with a trend that started in 2009, fewer small businesses to small businesses, and no bank sursought access to credit in 2010, according to the National Federation of veyed expected deterioration in C&I Independent Business. In NFIB’s February 2011 “Financing Small Business quality to firms of any size in 2011 as and Credit Access” report, the group found that there was a decline in those long as economic activity progresses. n seeking loans from 55% in 2009 to 48% in 2010. Michael Mazur is senior manager in ABA’s And while 41% of small businesses said they were able to obtain the credit Benchmarking and Survey Research Group. they needed, NFIB found a decrease in small business banking competition, mmazur@aba.com which had been increasing since 1980. 40  |  ABA BANKING JOURNAL  |  March 2011 What small businesses say* 31% 18% 50%

Table of Contents for the Digital Edition of ABA Banking Journal - March 2011

ABA Banking Journal - March 2011
Contents
Chairman’s View
Editor’s Column
The Economy
Bank Notes
ABA Community Banking: Got the Blues? Try a Little Reinvention
Pass the Aspirin
Tech Topics
Put Your Capital to Work
Still Waiting in the Wings
Compliance Clinic
Compliance Inbox
ABA Resources
Surveys & Trends
First Person

ABA Banking Journal - March 2011

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