Risk Survey: Small Business Lending on the Comeback Trail
We just announced the results of our latest quarterly survey of US bank risk professionals. They seem to be feeling good about small business lending.
In fact, by a margin of more than 2 to 1, survey respondents said that both the approval rate for small business loans and the total amount of credit extended to small businesses would increase rather than decrease over the next six months. And more than half of respondents predicted that the supply of small business credit would meet demand.
This is the second consecutive quarter that our US survey found such optimism after two years of more pessimistic results. Moreover, nearly three-quarters (73%) of respondents believe that delinquencies on small business loans will stay flat or decline over the next six months. This is consistent with predictions for consumer delinquencies, where we have, as a rule, seen more optimism in recent surveys.
We all understand that small businesses are an important driver of employment and economic activity. If the optimism around small business lending expressed in our survey proves to be well-founded, then good things are in store for the US economy through the end of this year and into early 2013.
For full survey results, you can view the detailed report. As always, we want to say thanks to our survey partners, the Professional Risk Managers’ International Association (PRMIA) and Columbia Business School’s Center for Decision Sciences.