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Lending To Small Businesses To Increase

(4/25/2013)

In the latest positive sign for the U.S. economy, bank risk managers are forecasting that lending will increase to small businesses in 2013, according to a new survey. Conducted for FICO by the Professional Risk Managers International Association, the survey showed that more than half (52%) of risk managers believe that total credit extended to small businesses will rise over the next six months.

Additionally, more than 70% of the 255 survey respondents said that demand for small-business loans will rise, while nearly a third predicted that there will be enough credit to meet such demand. In a related finding, the survey revealed that about 80% of respondents believe the delinquency rate on small-business loans will remain flat or decrease.

"In the past, the banking professionals we survey haven't been as optimistic about credit for small businesses as they have been for other types of lending," said Andrew Jennings, FICO's chief analytics officer. "The upbeat sentiment makes me think it's possible that we'll see small businesses picking up the pace of investing and hiring in the months ahead."

The FICO survey is supported by other recent data that demonstrates an opening up of credit for American small businesses. In March, the Small Business Administration's Office of Advocacy reported that small-business lending increased in the fourth quarter of last year for the first time in 10 quarters. Another survey, released by Biz2Credit – which connects entrepreneurs to loan options – revealed that approval rates for small businesses seeking loans at big banks have improved in recent months.



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