Small Business Lending: Is Your Glass Half-Empty or Half-Full?

Optimism is on the rise, but small business owners are cautious about asking for loans.

Trying to size up the state of small business lending can prompt the question: Is the glass half-full or half-empty?

Banks and government data point to a recovery in small business loans since the recession, with loan figures nearly back to their 2008 levels. But many company owners say while they're more upbeat about the economy, they're not planning to ask banks for financing.

Some have enough on hand. That's what nearly half of the companies queried said in a survey released in March by the Federal Reserve's regional banks. But 27 percent said they didn't want to take on debt. Some are skittish about borrowing after getting stung by the recession. Interest rates that have been rising, and making some owners think about higher repayment costs, could also be a part of it. And 17 percent didn't apply for financing because they expected to be rejected.

Gregg Ward says he's struggled to get even small lines of credit, $25,000 and under, despite a good credit history, because bankers he's applied to are still so conservative years after the Great Recession.

"They're not easing up," says Ward, owner of an eponymous San Diego-based executive coaching and consulting firm. "It makes it less likely I'm going to expand my business." Read more

Joyce M. Rosenberg - Inc. - 3 May 2017