Are Banks Finally Getting Ready to Lend?

If you’ve been on the fence about seeking a small business loan, the results of the 2012 Banking Trends Outlook Survey by Omega Performance suggest now might be the time to stop dithering and start applying for the financing your business needs.

money roll

The global survey of bankers has good news for both businesses and consumers seeking loans, but the outlook is especially optimistic for small business, with 74 percent of bankers worldwide reporting that their banks were planning to increase their small business lending in 2012. Bankers were also very optimistic about the economy’s growth prospects, both globally and in the U.S. in particular. Here’s a closer look at what the survey discovered and what it means to your small business.

Loan Standards to Ease

In the U.S., 19.8 percent of banks planned to ease their lending standards for consumer and commercial loans slightly, while 15.1 percent planned to tighten them slightly. The majority (59.9 percent) said standards would remain the same.

What It Means to Your Business: If you’ve tried and failed to get financing in the recent past, finding a different bank—one that is easing its loan requirements—could be the key to success this time around.

Commercial Lending to Rise

While commercial lending is projected to increase around the world, the outlook is especially positive in the U.S. Some 60.8 percent of U.S. banks surveyed said they plan to do more commercial lending in 2012, and 12.7 percent said they plan to do “considerably more.” About 19 percent plan to do the same amount of commercial lending. Just 7 percent reported plans to decrease or “considerably decrease” the amount of commercial lending.

What It Means to Your Business: Talk to your banker about his or her bank’s plans for commercial lending going forward. Watch the news for reports on banks increasing their commercial lending. Even banks that weren’t highly active in commercial lending might be getting in on the act, so keep your ears open for new entrants into the field.

Banks Will Pursue Small Business

Drilling down even further, small business lending in particular is projected to increase around the world, with the U.S. outlook again being particularly good. Among U.S. banks, 12.7 percent said their small business lending would increase drastically in 2012, and 63.7 percent said it would increase slowly. Some 18.9 percent said small business lending would stay the same, and just 4.7 percent said it would decrease.

In fact, when asked which areas of lending they would actively pursue in 2012, the leading answer was “small business.” More than 78 percent of banks reported they will pursue small business lending this year, far ahead of the 66 percent that will pursue lending to midsized and large businesses.

What It Means to Your Business: As more banks pursue small business lending, you could find yourself with more options, including new banks you may not have considered before. Use a variety of sources to keep in the loop as to which banks are most aggressive in pursuing small business loans.

Bankers Are Optimistic

Behind banks’ positive plans for increased lending is their belief that the economy is improving. Sixty-six percent of U.S. banks surveyed project the U.S. economy will “improve slowly” for the remainder of 2012; only 31.1 percent project it will remain flat. A mere 1.9 percent expects decline.

What It Means to Your Business: Just as banks’ tightening of credit at the beginning of the recession threw a chill over the economic landscape, their optimistic outlook now can help thaw everything from business plans to consumer spending. Make sure your business is prepared to take advantage of economic growth by developing a plan now to get the financing you need to serve customers, expand and thrive.

Lending Photo via Shutterstock

Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.