It appears as if banks are loosening their grip and are lending again to small businesses. Entrepreneurs report they are finding it much easier to get loan and credit line increases. Banks haven’t eased up to the lending of pre-recession years, especially when it comes to new or early stage businesses. But post-recession lending is up, a hopeful sign that small businesses will be able to borrow much needed capital to expand and hire workers.
Evidence that small business lending has improved is piling up, reports the Associated Press. Banks had $287.64 billion in outstanding loans to small businesses as of Dec. 31, up 1.4% from a year earlier, according to the Federal Deposit Insurance Corp. In January, the dollars loaned to small businesses by banks, independent commercial finance companies and corporations, increased 4% from last year, according to Thomson Reuters and PayNet. And a February survey by Pepperdine University’s Graziadio School of Business and Management found that 39% of small business owners who applied for bank loans in the previous three months were successful, up from 34% in a survey taken in October and November.
Small business owners have reported faster turnaround times in getting loan approvals, whereas it now takes two to three months compared to nearly 8 months over a year ago.
Small-business loans at Wells Fargo rose 18% last year, according to Lisa Stevens, head of small-business banking for the San Francisco-based bank. Companies’ sales and cash flow are improving as are balance sheets, Stevens told AP. The bank is offering credit-line increases if Wells thinks owners are positioned to handle the debt.