Small business lending has been relatively turbulent in recent years, and disbursement volumes continue to fluctuate. Though many advocacy groups and government agencies have worked to boost lending through initiatives and support, consistency has been difficult to come by.
However, small business loan approvals seemed to end the summer on a high note, as both the Reuters and the U.S. Small Business Administration recently released reports implying that borrowing was up across the nation.
Reuters index logs highest level in August
The Reuters/PayNet Small Business Lending Index for August’s volumes was recently released by the two firms, and the number reached 109.9, up from the 106.7 logged in July. This, Reuters explained, was the highest level the index has reached so far in 2012, while the indicator has been consistently on the rise. The news provider further noted that August loan disbursement volumes were up 10 percent year-over-year.
“We’ve got a winning streak going,” Bill Phelan, founder of PayNet, explained to Reuters. “These business owners are looking out three, to six, to nine months, and they are seeing some positive profit-producing opportunities: there must be something these business owners are seeing.”
In the past, increased loan disbursement volumes over one period generally translated to improved economic conditions between six months and one year later, including increased hiring and productivity. Reuters noted that its index is similar in this way, as it often indicates what conditions will be roughly one or two quarters down the road.
Reuters added that PayNet also logged decreases in overdue loan repayments, including a record low of 1.16 percent loans overdue by 30 days. Rates loans past due in the two other categories – 90 days behind (severe delinquency) and 180 days behind (default) – each fell 0.02 percent in August as well.
Increased loan disbursements often coincide with such drops in delinquency, as financial institutions are getting paid enough to start offering new lending opportunities.
SBA Administrator reports solid performance
Karen Mills, the SBA Administrator, recently wrote a blog on the agency’s official website that explained how banks across the nation have increased small business lending this year. According to Mills, the 13 banks that had promised to disburse $20 billion in small business loans through 2015 have already reached the $11 billion mark, setting the pace to accomplish the agreement one year early.
Mills stressed the need for higher disbursement volumes, as the nation’s small businesses comprise a disproportionate rate of new hiring, gross domestic product (GDP) and patent awards when compared to their larger counterparts.
As the lending landscape continues to be unsure, though, small business owners can improve their chances of loan application approvals by using BoeFly. This firm has more than 2,200 lenders, all of which will be considered through just one loan application from the borrower.
BoeFly’s complex algorithms match borrowers with the lenders best-suited to their specific business needs, saving entrepreneurs time and headaches while improving the success of the application process.