Small-Business Lending Needs Improvement
History is quite clear in showing that when the US economy is in transition (in the current case a recovery from a deep recesson) that it is often the small business community that leads the way and serves as both catalyst and engine for change. Productivity gains seen in the small cap space flow upward to benefit all corners of our economy - the consumer, government and medium and large cap companies.
The inability of American small businesses to shake off recessionary blues has been a significant impediment to progress in the recovery now in its 6th year. Much of the sluggishness in the small cap space can be attributed to a marked slowdown in small-business lending. As reported in the WSJ (8/18/2014), "small business lending has been stuck in a slow grinding recovery behind most other types of business and consumer loans. At the end of the first quarter (2014), banks held $585 billion in loans to small businesses, up 1% from last fall but still 18% less than the peak of $711 billlion in 2008. The latest official survey of loan officers showed that banks have loosened standards more quickly for medium and large companies than for small ones."
Things may be brightening in this area. During July, small banks (often the bank of choice for small business) recorded an 11% increase in "the total amount of commercial and industrial loans held. July was the 4th straight month with a double-digit percent increase."To read more on this subject, please click on the link below.
http://online.wsj.com/articles/small-business-lending-is-slow-to-recover...
