The Federal Reserve Bank of New York today released results from its Small Business Borrowers Poll that include new data and analysis from more than 850 local small businesses. The poll takes a fresh look at borrower demand by asking firms not only about credit applications but also about reasons for not seeking credit. The results provide insight into firms’ decisions about formulating credit demands.
A third of the region’s small businesses polled this spring sought credit in the first quarter and two-thirds were approved for a credit product. However, many firms chose not to apply at all, either because they were paying down debt (19%), already had sufficient credit (21%) or believed they would be turned down (27%).
The poll showed the approval rate for vehicle and equipment loans was relatively high at 71% versus new lines of credit, business loans and extension of existing lines of credit with approval rates of 33%, 28% and 52%, respectively.
All in all, a marked improvement from this same time last year. With rates remaing at unprecendented low levels and credit restrictions abating, now may be the time to think about expanding the business – before your competiton does.
Let me know how I can help! Enjoy the weekend.