The Reasons Behind Why Small Business Loans Are So Hard To Get From Banks

The DBF Team is seeing this every day. Success with the SBA is becoming harder and harder.

Bank lending requirements are tightening up more and more with each passing day.

Here is a quick read from The New York Times Business Blog.

The New York Times

Today in Small Business: Why Loans Are So Hard to Get

By GENE MARKS
October 23, 2013, 12:17 pm

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners today.

Finance

Ann Marie Wiersch and Scott Shane explain why small businesses can’t get loans: “Fewer small businesses are interested in borrowing than in years past, and at the same time, small-business financials have remained weak, depressing small-business loan approval rates. In addition, collateral values have stayed low, as real estate prices have declined, limiting the amount that small-business owners can borrow. Furthermore, increased regulatory scrutiny has caused banks to boost lending standards, lowering the fraction of creditworthy borrowers. Bank consolidation has reduced the number of banks focused on the small-business sector, and small-business lending has become relatively less profitable than other types of lending, reducing bankers’ interest in the small-business credit market.”