Small Business Lending Improving, But is It Enough?

In the past few years, small business lending has been a little bit uncertain, and that might have had a negative impact on companies' abilities to expand even as the economy continued to improve. Now, experts say conditions are much better than they were some time ago, but some worry whether those improvements are good enough for many independent owners across the country.

While the number of small business owners who said they experts to have considerable difficulties in obtaining credit over the next 12 months for a recent poll from Wells Fargo and Gallup is down on an annual basis, and now stands at 30 percent of those polled, that number may still be worrisome, according to a report from Bloomberg Businessweek. This was also the first time fewer owners thought they'd have difficulties in obtaining financing on an annual basis since the third quarter of 2008, when just 24 percent of those polled were cagey about their chances.

However, when compared with pre-recession numbers, the current improvements pale in comparison, the report said. Perhaps understandably, the amount of money granted to small businesses by lenders dipped some 78 percent between mid-2007 and the end of last year, and that is also reflected in owner sentiment about the ability to obtain financing overall. Around that same time six years ago, only 11 percent of those polled thought they would have difficulty getting credit.

The problem now is that it seems to be somewhat difficult for owners to gauge their abilities to receive financing simply because there is a wide swatch of data now out there about it, and some of the results of studies and polls can be extremely mixed, the report said. For example, data from the U.S. Department of the Treasury might be a little different from that issued by the Office of the Special Inspector General for the Troubled Asset Relief Program, and those two could vary from what was reported by private entities.

For these reasons, owners may want to do more to reduce that financial uncertainty by freeing up some of the money they already have. By looking for more affordable small business insurance coverage, which could include reducing costs for general liability insurance, among others, owners might be able to put their companies on a more solid financial standing while still keeping the policies that are vital to their businesses.