Small business lending reaching 'new normal'

Published on NewsOK Modified: June 18, 2014 at 6:29 am •  Published: June 18, 2014
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NEW YORK (AP) — Banks are making it easier for small businesses to get loans, and they're giving companies better terms and lower interest rates.

That's the conclusion of researchers at Pepperdine University's Graziadio School of Business and Management and Dun & Bradstreet Credibility Corp., who Wednesday released the results of a survey on small business financing.

Forty-four percent of the small businesses surveyed last month said they received bank loans during the previous three months. That's a sizeable increase from 39 percent in February and 34 percent last fall.

The Pepperdine Private Capital Access Index for small businesses rose to 27.7 from 27.1 in February. It measures companies' demand for and ease in getting financing, including loans.

Banks are taking more steps to persuade small businesses to borrow, said Dun & Bradstreet Credibility Corp. CEO Jeff Stibel. Interest rates for small businesses, which had been about 15 percent, are falling, he said. Banks are also willing to lend for longer terms than they did a few years ago. Stibel's company compiles credit reports on small businesses.

Banks are willing to lend because small businesses are generally healthier than they were during the recession and its aftermath, Stibel said. Their cash flow is stronger and they're keeping their expenses down, which makes them more appealing to risk-averse banks that want to lend.

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