Availability of credit to small businesses

[davelj]

This article came from Calculated Risk:

http://macroblog.typepad.com/macroblog/2010/05/how-discouraged-are-small-businesses-insights-from-an-atlanta-fed-small-business-lending-survey.html

The article looks into whether declining small business lending is due to a lack of credit or less demand. Here’s the punchline: “Perhaps not surprisingly, outside of the troubled construction and real estate industries, close to half the firms [small businesses] polled (46 percent) do not believe there are any obstacles [to getting credit] while only 9 percent report unwillingness on the part of banks.”

This jibes with something I’ve said in prior threads over the last year – the problem isn’t a lack of willingness on the part of banks to lend, it’s a lack of credit-worthy borrowers. Too many borrowers’ only experience with borrowing is over the last decade, which is not a representative historical sample. What’s happening right now is that “normal” underwriting standards (historically, that is) are now being re-applied to borrowers… and many borrowers haven’t experienced this “normal” before.

[EconProf]

Other articles have reinforced the idea that businesses, especially small businesses that do a disporportionate amount of the hiring, are just afraid to borrow. They don’t know what costs or regulations will be imposed by governments at all levels, so they are just hunkering down and surviving. Investing in new equipment or new hires takes optimism about the future, and they are rightfully afraid.

[EconProf]

Other articles have reinforced the idea that businesses, especially small businesses that do a disporportionate amount of the hiring, are just afraid to borrow. They don’t know what costs or regulations will be imposed by governments at all levels, so they are just hunkering down and surviving. Investing in new equipment or new hires takes optimism about the future, and they are rightfully afraid.

[EconProf]

Other articles have reinforced the idea that businesses, especially small businesses that do a disporportionate amount of the hiring, are just afraid to borrow. They don’t know what costs or regulations will be imposed by governments at all levels, so they are just hunkering down and surviving. Investing in new equipment or new hires takes optimism about the future, and they are rightfully afraid.

[EconProf]

Other articles have reinforced the idea that businesses, especially small businesses that do a disporportionate amount of the hiring, are just afraid to borrow. They don’t know what costs or regulations will be imposed by governments at all levels, so they are just hunkering down and surviving. Investing in new equipment or new hires takes optimism about the future, and they are rightfully afraid.

[EconProf]

Other articles have reinforced the idea that businesses, especially small businesses that do a disporportionate amount of the hiring, are just afraid to borrow. They don’t know what costs or regulations will be imposed by governments at all levels, so they are just hunkering down and surviving. Investing in new equipment or new hires takes optimism about the future, and they are rightfully afraid.

[sdduuuude]

Credit-worthy borrowers don’t want to borrow. It’s one of the traits that make them credit-worthy.

[sdduuuude]

Credit-worthy borrowers don’t want to borrow. It’s one of the traits that make them credit-worthy.

[sdduuuude]

Credit-worthy borrowers don’t want to borrow. It’s one of the traits that make them credit-worthy.

[sdduuuude]

Credit-worthy borrowers don’t want to borrow. It’s one of the traits that make them credit-worthy.

[sdduuuude]

Credit-worthy borrowers don’t want to borrow. It’s one of the traits that make them credit-worthy.

[jpinpb]

I would think if one were to start a business, you would have to, let’s say, “predict” how your business will do and the income it will generate. Since our economy hasn’t been exactly thriving (but for government substenance) I’d be reluctant to take out a loan to start a venture in such an environment.

Taking out a non-recourse loan and gambling is one thing. Starting a business is a real risk. I’d say, it would even be hard to determine what business to start in these economic times. What would it be? Restaurant? Anything related to real estate or automotive? Retail? Tough out there.

[jpinpb]

I would think if one were to start a business, you would have to, let’s say, “predict” how your business will do and the income it will generate. Since our economy hasn’t been exactly thriving (but for government substenance) I’d be reluctant to take out a loan to start a venture in such an environment.

Taking out a non-recourse loan and gambling is one thing. Starting a business is a real risk. I’d say, it would even be hard to determine what business to start in these economic times. What would it be? Restaurant? Anything related to real estate or automotive? Retail? Tough out there.

[jpinpb]

I would think if one were to start a business, you would have to, let’s say, “predict” how your business will do and the income it will generate. Since our economy hasn’t been exactly thriving (but for government substenance) I’d be reluctant to take out a loan to start a venture in such an environment.

Taking out a non-recourse loan and gambling is one thing. Starting a business is a real risk. I’d say, it would even be hard to determine what business to start in these economic times. What would it be? Restaurant? Anything related to real estate or automotive? Retail? Tough out there.

[jpinpb]

I would think if one were to start a business, you would have to, let’s say, “predict” how your business will do and the income it will generate. Since our economy hasn’t been exactly thriving (but for government substenance) I’d be reluctant to take out a loan to start a venture in such an environment.

Taking out a non-recourse loan and gambling is one thing. Starting a business is a real risk. I’d say, it would even be hard to determine what business to start in these economic times. What would it be? Restaurant? Anything related to real estate or automotive? Retail? Tough out there.

[Author]

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