Blog Entries tagged 'lending'

Move to boost credit unions' small business lending--redux

annearf@aol.com — Thu, 10 Mar 2011 23:00:00 +0100

Small business borrowing has been on an increase, something I wrote about recently. Fact is, however, the real heroes of small business lending over the past three tough years have been credit unions, which upped their lending, while bigger banks mostly pulled the plug on it.

Now there's about to be a bill in the Senate increasing the amount credit unions are allowed to lend to small businesses.

Only it's the second time around for this legislation, so the futu [...]

Lending to small business picks up

annearf@aol.com — Wed, 05 Jan 2011 23:00:00 +0100

Some good news in the area of small business borrowing.

Specifically it rose 17 percent in November to the highest level in more than two years, according to the Thomson Reuters/PayNet Small Business Lending Index. It was the ninth consecutive monthly increase. The Index measures loans, leases and credit lines given to small businesses.

Also other PayNet data showed that fewer companies are having trouble making existing loan payments. Accounts late by 30 days o [...]

Fed providing contradictory reports about small business lending

annearf@aol.com — Tue, 14 Dec 2010 23:00:00 +0100

We see all sorts of conflicting reports about whether the decrease in small business lending is caused by meager demand or stingy supply. But the research usually comes from different institutions.

Now it looks like people within the Federal Reserve are reporting divergent opinions.

The Flow of Funds report for third quarter just came out and it found that lending decreased. Net borrowing by non-financial non-corporate businesses fell by $162.7 bil [...]

Are small business borrowers really paying attention?

annearf@aol.com — Wed, 01 Dec 2010 23:00:00 +0100

The Obama administration and the SBA may have tried recently to loosen small business lending through new legislation. But a new study shows they have a long ways to go to reach small companies-or even to get them to understand what the SBA does.

A study from CIT Group, which surveyed more than 300 small business owners, found that around 50 percent of respondents didn't know what the Small Business Jobs and Credit Act was or how it might help their companies. The stu [...]

Federal Reserve: Demand for small-business loans hasn't dropped

annearf@aol.com — Wed, 27 Oct 2010 23:00:00 +0100

The contraction in lending to small companies is a result of deteriorating revenues, not a slowdown in demand.

That, at least, is the conclusion of a new report from the Federal Reserve Bank of New York. It studied 426 small businesses last summer and found that demand for loans actually has increased, but banks have been turning more companies down. And that, of course, flies in the face of other research that shows the lack of lending is due to fewer businesses seeking loans.

T [...]

Small banks can’t lend even if they want to

marinecole@hotmail.com — Tue, 13 Jul 2010 23:00:00 +0100

Federal Reserve Chairman Ben Bernanke asked lenders to ease credit to small businesses earlier this week, but the situation isn't likely to change anytime soon.

With stricter lending standards, small community banks have stopped lending to small companies. Part of the problem is a lack of demand from solid businesses. Most want to save their cash and preserve their credit while there's still uncertainty surrounding the economic recovery.

Even when credit-worthy businesses [...]

SMIDs to banks: lend me money

karen@karenkroll.com — Mon, 07 Jun 2010 23:00:00 +0100

According to the Fed’s April 2010 survey on bank lending practices, almost all – 90-plus percent of – banks stayed the course when it came to lending to small and medium-sized firms. Just under six percent tightened standards, while about two percent eased up.

As we wrote aft [...]

Fed survey: Lending standards little changed, loan demand still weak

mquinn@cfozone.com — Tue, 04 May 2010 23:00:00 +0100

The latest survey of senior loan officers by the Federal Reserve showed that bank lending standards on commercial and industrial (C&I) loans were little changed over the three months ended in April.

The survey, however, did show that most of the banks that reported having eased some lending policies in the April survey were large banks. This suggests that larger banks have healed enough to start lending to customers other than those with the strongest credit. On the other [...]

No wonder banks are having problems with credit cards

mquinn@cfozone.com — Sun, 11 Apr 2010 23:00:00 +0100

It's no secret that lenders have been frantically scaling back consumer credit since the onset of the financial crisis. Since the fourth quarter 2008 through February of this year, revolving consumer credit outstanding has been cut by more than 13 percent, according to Federal Reserve data.

But now that the economy has begun growing again and the new credit card laws are in effect, banks need to start figuring out how to make money through their once massiv [...]

Banks still gun shy when it comes to lending

mquinn@cfozone.com — Thu, 11 Mar 2010 23:00:00 +0100

There have been many attempts to call a bottom to credit quality. Much time has been spent scouring through bank filings, combing over charge-off data. The thinking -- or hope, at least -- is that once credit quality stabilizes banks will fully get back into the business of banking.

But, as American Banker reports, executives at major banks are pretty comfortable with how their loan books are performing -- and they still don't plan to start doling out more money [...]

Blackstone’s Schwarzman: Free the bankers!

mquinn@cfozone.com — Thu, 11 Feb 2010 23:00:00 +0100

It's probably safe to say that we're all a little ticked about how long the financial regulatory reform process is taking. And Blackstone Group chief executive Stephen Schwarzman is right there with us.

But it's not so much because he's eager for fundamental change, though he admits change is needed across the financial landscape, not just banks.

Rather, the private equity magnate is worried that all this dilly-dallying is keeping banks from moving for [...]

Regulators to bankers: More George Bailey, less Mr. Potter

annearf@aol.com — Mon, 08 Feb 2010 23:00:00 +0100

Banks have been between a proverbial rock and a hard place when it comes to small business lending. The Obama administration is telling them to step up loans. But the message from regulators is tread carefully and look out for risk. Since many small businesses, especially in this economy, are in a precarious state, what's a lender to do?

Now, it looks like the Federal Reserve, along with a bunch of regulatory agencies, are finally trying to untangle these messages. A re [...]

The big problem of small business

mquinn@cfozone.com — Mon, 01 Feb 2010 23:00:00 +0100

In its January 2010 Senior Loan Officer Opinion Survey on Bank Lending Practices released Monday, the Federal Reserve determined that the 78 respondents generally ceased tightening standards on many loan types in the fourth quarter, but have yet to unwind the considerable tightening that has occurred over the past two years. You can read the full results here.

As it often does in the survey, the Fed included some special questions for respondents. One area the central [...]

Businesses increasingly turn to bonds over loans

mquinn@cfozone.com — Tue, 05 Jan 2010 23:00:00 +0100

Despite their many protestations that their balance sheets are strong and that they are open for business, bankers just aren't lending like they used to, even to companies with strong credit. Instead, businesses are increasingly finding their financing in the debt markets.

For the first time on record, global corporate investment-grade bond issuance surpassed investment-grade corporate lending in 2009, the Wall Street Journal reported on Wednesday using data from Dealogic [...]

The awful truth: Banks don't lend to small business because they're bad credit risks

annearf@aol.com — Sun, 13 Dec 2009 23:00:00 +0100

President Obama just met with bankers who received government largess through TARP, telling them, among other things, to start lending to small business. He's also proposed increasing Small Business Administration guarantees, waiving fees and other measures aimed at stepping up lending.

But, there's an urgent issue these steps don't address. Banks aren't lending, in part, because many small businesses simply are much worse credit risks at the moment than they were [...]

Small business finally getting its big moment

mquinn@cfozone.com — Tue, 17 Nov 2009 23:00:00 +0100

So far this has been Small Business Love Fest Week. It's certainly about time. But given how long it has taken for everyone's attention to get here, it feels like little more than damage control.

First, there was Goldman Sach's announcement that it was committing $500 million to small businesses. The move is being met with understandable derision and has the feeling of a PR move. Goldman even got the beloved Warren Buffett to lend his name to the initiative. The cy [...]

Stagnant loan growth scary proposition for economic recovery

mquinn@cfozone.com — Wed, 21 Oct 2009 23:00:00 +0100

You think the worst is behind banks? Financial institutions may not say so outwardly, but their numbers would beg to differ.

Let's face it, the U.S. is an economy built on credit, whether it be for consumers or for businesses. Banks know this. That's how they make their money. Or at least that's how they should be making their money.

And even though many banks are back to posting profits, it's not necessarily in ways that should make you [...]

Small biz turning into economic millstone

mquinn@cfozone.com — Mon, 12 Oct 2009 23:00:00 +0100

It's easy to forget about the little guy.

Given the tumult in the banking sector and the economy in general over the past year, it's almost understandable that small businesses haven't been everyone's biggest concern.

That seems to be changing now that banks -- while likely not out of out harm's way -- have stabilized and corporate earnings season is a bit less terrifying.

CFOZone, for one, has been writing more on the p [...]

Small business lending on the upswing. Maybe

mquinn@cfozone.com — Thu, 01 Oct 2009 23:00:00 +0100

If you believe that small businesses are the heart and soul of the U.S. economy, well, I don't exactly know what to tell you.

The Small Business Administration, which ended its fiscal year on Wednesday, reported that it approved fewer than 45,000 loans in 2009, down 36 percent from last year, the Wall Street Journal reported Thursday. The dollar amount of those loans fell by almost 27 percent, to $9.3 billion over that time.

However, the year ende [...]

Higher capital requirements for banks may not reduce lending

marinecole@hotmail.com — Wed, 23 Sep 2009 23:00:00 +0100

If the specifics of the regulatory reform of the financial industry may still be a bit blurry, it seems to be a given that some financial institutions, especially banks, will be required to maintain higher capital ratios to curb risk.

But an increase in capital requirements for banks may not be so bad for the industry after all, according to a report published yesterday by the Pew's Financial Reform Project , which brings nonpartisan analysis on the financial industry to policy mak [...]