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

Debt can be a useful tool in building a business, as long as you don’t spread yourself too thin trying to repay the...

New York City has a thriving startup...

2015 was an interesting year for the...

What is it about one startup that...

Two hot topics California businesses will be thinking about as 2016 gets going are a minimum wage increase and a...

Small Business Administration (SBA) loans can be a great resource for businesses that are struggling to obtain...

Startup valuations can sometimes...

Recent News

01/29/16
San Diego, CA – January 28, 2016 – Bridge Bank’s Life Sciences Group (LSG) today...
11/20/15
MINNETONKA, Minn., November 17, 2015 - Zyga Technology, Inc., a medical device...
10/29/15
Reston, VA – October 29, 2015 – Bridge Bank today announced the recent hiring of...
Heatspring Magazine, Gabrielle Rossetti
10/28/15
Heatspring Magazine, October 19, 2015 - Christopher Lord, Managing Director of...
10/21/15
Atlanta – October 21, 2015 – Bridge Bank today announced the recent hiring of two...
09/23/15
Robert Lake Joins Bridge Bank to Lead Life Sciences Growth Initiative SAN JOSE, CA...
09/14/15
The dollar gave back last week's gains vs. the Euro and then some as the focus...
09/09/15
Leading Technology Lender Focuses New Practice on Services for Venture Capital and...
08/21/15
Last week’s devaluation of the Chinese Renminbi has continued to keep the foreign...
07/28/15
The Euro opened the week stronger within an overall risk-off context climbing from...

Twitter

Featured Insights

Featured Insight

Debt can be a useful tool in building a business, as long as you don’t spread yourself too thin trying to repay the...

Featured Insight

Two hot topics California businesses will be thinking about as 2016 gets going are a minimum wage increase and a...

Featured Insight

Small Business Administration (SBA) loans can be a great resource for businesses that are struggling to obtain...

Recent News

New York City has a thriving startup...

2015 was an interesting year for the...

Twitter