Fed survey indicates credit quality will rise in 2013

New data released by the Federal Reserve indicates some banks are beginning to ease their lending standards somewhat, as an increased market for business financing is leading more entrepreneurs to seek loans. The survey took into account practices at both domestic banks and foreign firms operating within the U.S. 

Bank lending supposedly on the rise 
"Most fractions of domestic banks reported having eased their standards across major loan categories over the past three months on net," read the Fed's report. "Domestic respondents indicated that demand for business loans, prime residential mortgages and auto loans had strengthened."

However, even with more relaxed lending standards and interest rates still low, economic growth is still limited. A recent report revealed the economy contracted at an annual rate of 0.1 percent in the fourth quarter of 2012, indicating lending may still be difficult for entrepreneurs to come by. Those that are lending more may be seeking additional business to keep up with the rise of smaller firms and nontraditional lenders. 

"Almost all respondents that reported having eased either standards or terms over the past three month cited more aggressive competition from other banks or non-bank lenders as an important reason for having done so," read the report.

Small businesses can still struggle 
If your business is having a rough time finding a lender, you certainly aren't alone. 
Even though standards seem  to be easing, small-business owners still often have a difficult time obtaining the capital they seek to effectively grow their businesses, increase staff levels and invest in new equipment and technology. 

If you're trying - and failing - to obtain a loan, it may be time to think outside the box. While you may be pitching your ideas to venture capitalists, big banks and local investors, why not try working with a smaller bank? A small or mid-sized institution can not only help you get the lending you seek, it can also help personalize processes to ensure your banking options fit your company's needs. 

Think a smaller bank can't handle the needs of a growing business? Small and mid-sized banks are highly competitive, knowledgeable about foreign exchange and international banking, and the specialized service an expanding firm needs to get its products and services to the public and expand, whether growth is nationwide or across the world. 

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