Surveying the Small
Business Financing Landscape
By Tracy Eden
past month or so, there has been a noticeable shift in the dialog
coming out of Washington, D.C. with regard to economic priorities,
with a stronger emphasis on job creation. As part of this emphasis,
the federal government has proposed and launched several initiatives
to help increase access to capital and grow small business
financing. One of these would transfer $30 billion to a new Small
Business Lending Fund that could be accessed by community banks.
But is a
lack of access to capital whatâ€™s really holding community banks back
from doing more small business financing? I donâ€™t think so, and
neither does Jim Blasingame, the creator and host of The Small
Business Advocate Show, the worldâ€™s only weekday small business
says that banks arenâ€™t lending money to businesses, and if theyâ€™re
talking about big banks, theyâ€™re right,” Jim said when I appeared on
his show recently. “But every community banker Iâ€™ve talked to
says theyâ€™ve got lots of money to lend. Access to capital isnâ€™t the
problem—the problem is that small businesses arenâ€™t asking
banks for loans.”
survey conducted among business owners and executives by Forbes
Insights and CIT bears this out. Only 11 percent of respondents said
they had sought new lines of credit or small business financing over
the past year in an effort to help improve their cash flow. Also,
just 11 percent said that their greatest cash flow challenge in the
past year was difficulty in securing small business financing, the
second-lowest ranked answer in the survey.
are available to help well-run small businesses finance growth and
working capital, thereâ€™s no question that theyâ€™re harder to obtain
than they used to be.
environment, owners need to be more agile, flexible and transparent.
Meanwhile, lenders have expanded their reporting and recordkeeping
requirements, as well as monitoring of financial performance.
Theyâ€™re also examining collateral more closely to try to ensure that
borrowers can repay their loans.
What Business Owners Are Thinking:
Insights/CIT survey revealed some interesting findings with regard
to how business owners feel about their companies, the overall U.S.
and world economies, and Washington, D.C.â€™s effort to revive the
Respondents were mostly optimistic about prospects for
their companies this year, thought they were more cautious about
the overall economy in general. More than half (61 percent)
expect their own companyâ€™s revenues to increase this year,
primarily because the recession has forced them to work harder
and smarter than they ever have before.
More than three-quarters of respondents (78 percent)
believe they will have to learn to adapt and do business in new
ways in order to succeed in a more competitive marketplace.
Very few respondents believe that policies enacted by
the federal government are helping the recovery. A full 90
percent said that economic stimuli does not benefit small
business. However, most (58 percent) do believe that proposals
to raise SBA loan limits will be helpful to small businesses.
Most encouraging is the belief among owners and
executives in the power of small business as the main driver of
the U.S economic engine. Eighty-three percent believe that small
businesses will play a major role in helping lead the economy
back to recovery.
doesnâ€™t kill you makes you stronger, and this seems to be how
business owners feel about their prospects for success this year and
beyond. “The survival strategies that companies use during a
downturn can often aid them during the resulting upswings and make
them more resilient,” the report noted.
businesses are looking ahead to 2010 in anticipation that the ordeal
of the 2009 recession may be fading,” it concluded. “Having made it
through the economic trauma, business owners are hoping that the
hard lessons theyâ€™ve had to face will provide them with the
discipline and control necessary to help ensure their success.”
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