Glimmers of Hope in Small-Business Lending

After more than two years of stagnation, it appears that small-business lending is on the rise. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing, increased 4% in March 2010, the first year-on-year gain since October 2007.

A recent Time Magazine article reported that many small and community banks are now seeing more demand for loans, which is a positive sign for the economy. According to the article, economists have expressed concern that despite the 3.2% first quarter economic activity growth, there was a lack of business lending activity. Business lending demonstrates business growth, they argue. Businesses in growth mode need financing to purchase equipment and hire staff, and without that there can’t be sustained economic recovery.

As we have discussed in previous posts, banks are lending money, but they are being more cautious about their investments. This means they are conducting more careful due diligence, which includes their own certified equipment appraisals and business valuations to ensure that they will recoup their losses should a loan default. Having a defensible, impartial appraisal in hand can help increase the chances of getting much-needed money for a small business.

By: Present Value

Additional Reading

5 Cs of Lending (How Appraisal Fits in Even Though It Doesn’t Start with C)

Got a Startup? Get a Business Valuation

Present Value: More than an Appraisal Firm

Tags: appraisal, business appraisals, Business Valuation, certified machinery and equipment appraisal, equipment appraisal, PayNet, present value, small-business lending, Thomson Reuters, Time Magazine

This entry was posted on Tuesday, May 18th, 2010 at 6:18 pm and is filed under Business Valuation, Machinery & Equipment Appraisal, business appraisals, small business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.