Mixed small business messages from federal data

Jessica SarterSmall Business Lending

The past several months have been characterized by dramatically varied reports regarding small business health, especially when it comes to employment and lending. However, as 2012 comes to a close, more studies indicate that the slower cycle of lending and borrowing experienced at the tail end of the summer and early fall will lead to better conditions in the coming months.

Small businesses will likely be driven to expand operations following what initial estimates have shown to be a very successful Thanksgiving weekend. Largely fueled by Small Business Saturday, local merchants got a much needed shot of life, which many economists hope will lead to more investments in employees and commercial real estate.

Fed’s borrowing concerns
The Federal Reserve recently released the results of its October 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices report, which revealed a relatively stagnant borrowing climate across the nation. According to the Fed, October’s figures marked the third straight month of unchanged demand for commercial and industrial (C&I) loans.

Stagnant or decreased demand for loans is often characteristic of struggling small business confidence, as those owners who do not feel they will be able to boost revenues will rarely take out new lines of credit. A bright spot in the Fed’s survey, though, was an indication that loan standards continue to ease across the nation, which could help fuel more deals in the coming months.

Further, some of the banks that responded to the survey noted an increased demand for commercial real estate loans. As that specific sector has struggled in the years following the recession, this could mean more preferable occupancy rates in future quarters.

Not over yet
Though 2013 is right around the corner, the busy holiday shopping season might have reversed some of the more dismal readings apparent in the Fed’s survey. The Washington Post recently reported that the latest government data indicated that consumer confidence hit its highest mark since before the recession, while business confidence also trended upward in the past several weeks.

The two factors are crucial in boosting demand for small business loans, as well as improved employment conditions and better overall economic conditions.

Small business owners looking for loans should consider using BoeFly, as this service can expedite the application process and ensures the best possible deal on a line of credit. The firm has thousands of participating lenders and uses complex algorithms to match borrowers with the best-suited creditor, all through just one loan application.