Report: Small business credit conditions worsened Q4 2012

The last few months of 2012 may have hurt small businesses, according to new data from the Experian/Moody's Analytics Small Business Credit Index. The report showed that in quarter four 2012 the index fell to 97.3, its second consecutive decline and lowest reading since 2011, giving the small-business credit outlook a poor end to the year.

Data from the report indicates small-business credit conditions worsened during the final months of 2012, as delinquent debt and lower personal income hit entrepreneurs hard. Company leaders are having a hard time paying off current debt, and balances less than 60 days past due shot up 20 percent during the fourth quarter.

"Small-business credit quality weakened at the end of last year, as the Midwest drought, Superstorm Sandy and cuts in government spending weighed on the economy," said Mark Zandi, Moody's Analytics chief economist. "Small businesses continue to struggle to meet their financial obligations. However, it is encouraging that credit appears to be growing again for the first time since the recession. More freely flowing credit to small businesses should support more investment and hiring and reinforce the broader economic recovery."

Many can't pay, but loan approvals up 
Despite many business owners being unable to pay current debts, Biz2Credit recently revealed loan approvals for small companies are up slightly. Approval rates from big banks were up to 15.3 percent in January, the highest number the Biz2Credit Small Business Lending Index has ever recorded. However, small banks still have more impressive lending numbers, with approval rates increasing to 49.9 percent last month. Credit union loan approval dropped once again to 46.9 percent.

"With traditional banks easing credit, the fallout effect is that alternative lenders are getting more requests from lesser qualifier borrowers," said Rohit Arora, Biz2Credit CEO.

Even with credit conditions deteriorating and some entrepreneurs unable to pay off current debts, that doesn't mean the outlook for every business owner is bleak. If you're a company owner with a strong credit history in need of business financing you may find working with a small or mid-sized bank can best suit your specific needs. In addition to approving more loans, such firms can provide more personalized solutions that help business owners like yourself ensure company finances are in order and enterprise interests being taken care of properly. 

Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs.

Getting Started

Find your ideal banker:

Select any filter and click on Apply to see results

Featured Insights

A new report released by KPMG International and CB Insights said...

Startup accelerator Y Combinator is known for its innovative model in providing...

Beginning June 24, 2016, the Small Business Administration will start accepting...

In the continued trend of...

According to venture capitalist Bryce Roberts, traditional venture capitalism...

The mobility services landscape has been developing quickly, with ride-hailing...

Venture capital firm Y Combinator, which many call the world's most powerful...

Healthcare has been slower than other industries to adopt digital technologies....

HP Inc., a company that stemmed from the division of Hewlett-Packard, recently...

Valuations in the venture capital (VC) market are either in decline or flattening out, primarily due to inflated...

Recent News

06/23/16
SUNNYVALE, CA -- 06/20/16 -- Viveve Medical, Inc. ("Viveve") (NASDAQ: VIVE), a...
06/21/16
New Office on Famed Sand Hill Road Furthers Bridge Bank's Commitment to Serving...
06/01/16
Oakland, CA – June 1, 2016 – Bridge Bank today announced the recent hiring of...
05/23/16
New Office Located in the Historic Russ Building Expands Bridge Bank’s Offering SAN...
05/04/16
Ruvalcaba Receives 2016 Character Award San Jose, CA – May 4, 2016 – Bridge Bank...
04/28/16
San Jose, CA – April 28, 2016 - Bridge Bank and Trinity Capital Investment, a...
04/01/16
SOUTH SAN FRANCISCO, Calif., April 01, 2016 -- Sunesis Pharmaceuticals, Inc. (Nasdaq...
03/23/16
View the 2015 Western Alliance Annual Report
03/22/16
Following a Record-Breaking Year of Growth, Leading Outsourcing Company Partners...
02/17/16
Durham, NC – Feb 17, 2016 – Bridge Bank today announced the recent hiring...

Twitter

Featured Insights

Featured Insight

Valuations in the venture capital (VC) market are either in decline or flattening out, primarily due to inflated...

Featured Insight

Financial institutions operate at the heart of our economic system and as such, are hyper-aware of market indicators...

Featured Insight

It all started back in 2000 with the objective to capitalize on the explosive growth in technology and provide a...

Recent News

A new report released by KPMG International and CB Insights said...

Startup accelerator Y Combinator is known for its innovative model in providing...

Beginning June 24, 2016, the Small Business Administration will start accepting...

Twitter