Small Business Lending In January Falls To Below November Levels
Written by Ken Gaebler
Research finds that small business lending declined slightly in January.
For much of 2010 small business news experts pointed to a lack of available credit as the nexus of this sector's continuing problems. However, a recent report is suggesting that the real difficulty may in fact be a lack of demand.
According to the Thomson Reuters/PayNet Small Business Lending Index, borrowing for small businesses may not return to pre-recession levels for at least another year or two, as seasonally adjusted rates fell from December to just below November's level.
William Phelan, PayNet's president and founder, revealed that low demand and the slow rate of recovery could be explained by what small businesses are borrowing to finance. Rather than borrowing to fund expansion plans, entrepreneurs are taking out loans to mainly replace old equipment.
"Small businesses are not coming out of the gate aggressively in 2011," Phelan told Reuters. "We are calling it the long-haul recovery."
However, last week, Treasury Secretary Timothy Geithner said that the U.S. financial system is currently in a much stronger position than it was before the economic crisis.
Have Friends Who Might Like This Article?
Share this on Twitter
Let them know on LinkedIn
Ready to Learn More? We Think You Might Like These Articles:
About Our Small Business News
If you liked this small business news article, you can find many other small business news articles on our site. We cover the latest news stories for business owners. In addition to breaking news for entrepreneurs, we also have tons of how-to articles that cover topics like getting business loans, preparing a marketing plan, getting publicity and much more.