Micro C&I loans have another strong showing

Jessica SarterCommercial Lending

Government officials and financial institutions have increased efforts to support small business success and growth in recent months, as smaller firms are disproportionately responsible for private GDP and hiring. This support includes everything from tangible small business loans to added advisory programs for new entrepreneurs.

As the Small Business Administration notes, 99.7 percent of all employer firms are small businesses and more than 44 percent of total payroll is distributed by SMBs, making this sector imperative to a full economic recovery.

While these support efforts have succeeded in some respects, the latest SBA Quarterly Lending Bulletin revealed a 1.3 percent decrease in total outstanding loan valuations during the first quarter of 2012, citing data from the Federal Deposit Insurance Corporation. The FDIC further found that macro and micro loans were down from late-2011 volumes.

Of all categories, commercial and industrial (C&I) loans from large-sized consolidated depository lenders faired the best, with 2.2 percent year-over-year growth.

Businesses in need of additional financing should consider using a service like Boefly for their small business loan needs. Through its advanced algorithm and one simple loan application, the firm weighs a business’ needs and specifications against the options of thousands of lenders, making for the most efficient and effective process.

The previous SBA Quarterly Lending Bulletin also cited high demand for micro loans through its program as driving overall growth, though these loans are substantially smaller and can only be used for certain facets, such as working capital and equipment purchases.

Because of this trend, the last several bulletins have shown a clear decrease in the average size of small business loans. However, many financial institutions have cited easing their lending standard specifically for commercial and industrial loans in light of recently increased demands, which could bolster the average loan size.