Credit Eases for Small Business Owners Seeking Capital

The economy is at last starting to show signs of recovery. Consumer confidence surged in November to its highest level since July, an indication that Americans may be more willing to spend. Holiday shopping figures for Black Friday and Cyber Monday were robust. The government jobs report on December 2nd announced that unemployment had fallen to 8.6 percent, its lowest level in 2 1/2 years.

falling money

I am seeing a growing number of small business owners registering on our platform for funding. This is a good sign. Meanwhile, credit has loosened in the past month. This has been a trend for most of the second half of 2011.

The big story continues to be the growth of small business lending by credit unions, which granted 57 percent of small funding requests last month. Overall, alternative lenders — credit unions, as well as Community Development Financial Institutions (CDFIs), microlenders and others — approved 62 percent of funding requests, a rise from 61.8 percent during October.

Loan approvals by smaller banks jumped to 47 percent in November. Meanwhile, big banks, which have the most stringent lending criteria, approved 10 percent of small business loan requests for the first time since April. Here is a closer look:

Month 2011 Big Bank ($10B+ assets): 

Lending % – Small Bank Lending % – Credit Union Lending %:

  • January:  12.8% – 43.5% – 48.9%
  • February:  11.9% – 43.9% – 49.1%
  • March:  11.6% – 44.2% – 48.8%
  • April:  10.4% – 44.6% – 50.1%
  • May:  9.8% – 45.0% – 51.2%
  • June:  8.9% – 42.5% – 52.3%
  • July:  9.8% – 44.9% – 53.4%
  • August:  9.4% – 43.8% – 54.2%
  • September:  9.2% – 45.1% – 55.5%
  • October:  9.3% – 46.3% – 56.6%
  • November:  10.0% – 47.0% – 57.0%

It’s not just mom and pop shops that are searching for — and receiving — infusions of capital. Professionals such as doctors, dentists, CPAs and lawyers are also increasingly looking to secure the funding they need to expand their practices.

As the 2012 election year approaches, we can expect President Obama to focus a sizable amount of attention on increasing small businesses lending and helping entrepreneurs grow their enterprises. The President has stressed that American entrepreneurship and business innovation will help lead us through the recent tough economic times. I couldn’t agree more.

Falling Dollars Photo via Shutterstock


Rohit Arora Rohit Arora, CEO and Co-founder of Biz2Credit, is one of the country's leading experts in small business finance. Since its founding in 2007, Biz2Credit has arranged $800M in small business loans and has helped thousands of entrepreneurs. Rohit was named Crain's NY Business "Entrepreneur of the Year 2011."

3 Reactions
  1. Thanks for that positive update, Rohit!

    What are you seeing with start-ups? Are any lenders lending?


    The Franchise King®

  2. Great and very inspirational article about the recovering economy. It gives me relief as an entrepreneur to see stats like this.

  3. I love to read these articles that finally have something positive to say, I hope these stats continue to increase!