Small businesses have been leading the charge in economic expansion throughout recent months. To foster continued growth in employment and gross domestic product, the federal government and many financial institutions have been increasing lending volumes, helping businesses expand and improve operations.
The latest edition of the Federal Reserve's Beige Book was released this week, and revealed a continued upward trend in economic activity. The Beige Book, also known as the Summary of Commentary on Current Economic Conditions, is compiled and distributed eight times a year, and data is pulled from 12 districts throughout the nation.
The report supported several other recent studies that showed marked improvement in commercial real estate lending and acquisitions, as prices continue to be at historic lows and loan standards remain eased. Additionally, the manufacturing sector has been strong in most districts for months now, and almost all sectors saw continued expansion in early July.
In the Boston district, six out of eight manufacturing firms reported either increased or steady demand and production. The commercial real estate market in the district experienced continued improvement, while contacts cited highly desirable financing conditions as a major driver of this growth.
In the second district of New York and third of Philadelphia, financial institutions saw an increased demand for loans to refinance, possibly because of the looming deadline to use Small Business Association's 504 loan program to restructure or refinance existing debts through the Small Business Jobs Act of 2010. The final day of this program is September 27.
The fourth district of Cleveland saw improvements in the manufacturing sector as well, fueled by increases in production stemming from new orders. This was also the case in the St. Louis district, which reported even stronger growth, as several area manufacturers announced plans to expand operations.
Since the last report, the majority of districts have seen substantial improvements in the manufacturing sector, which could be the result of widespread employment and wage increases. This indicates that small business owners may want to consider getting into the market now, as the trend has been consistently positive, according to Federal Reserve data.
If you do have plans to either begin a new manufacturing venture or expand an existing one, consider using a service like BoeFly for all of your financing needs. The firm offers an efficient and effective lending process, as just one loan application will reach thousands of lenders. Additionally, the company's advanced algorithms will ensure you are matched with the lender that is best suited to your specific needs.
The SBA 504 loan program's popularity has also been tied into widespread improvements to new commercial real estate purchases. Funding from the program can be used to purchase buildings, land and equipment, as well as for renovations of existing properties.
Earlier this month, Mercantile Capital Corporation, which specializes in 504 loans, announced a spike in this program throughout 2011 and so far in 2012. According to the bank, it closed a record 57 504 loans last year, and has already distributed 50 this year.
In the ninth district of Minneapolis, both commercial construction activity and purchases of new properties have improved, the Beige Book noted. All signs point to an upward trend in the commercial real estate and manufacturing sectors.
Entrepreneurs who have been waiting to jump into these markets should consider doing so soon, as prices for real estate will likely begin to increase as the sector becomes more healthy.