SOURCE: Small Business Research Board, Business Today Magazine

January 15, 2008 11:07 ET

While Majority of Small Businesses View Relationships With Lenders as "Good" or Better, Loyalty Remains Significant Issue, Says Latest Small Business Research Board Study

First of a Series -- 21% of Small Business Have Changed Principal Lending Relationships Within Last Four Years According to SBRB Report for "Business Today Magazine"

NORTHFIELD, IL--(Marketwire - January 15, 2008) - The relationships small businesses have with their principal lenders appear to be good and even getting better, however 21% of the owners and managers participating in a nationwide Small Business Research Board (SBRB) study said they have found new lead providers within the past four years.

Owners and managers of more than 450 small enterprises representing numerous industries responded to the SBRB poll co-sponsored by Business Today Magazine.

The latest poll clearly indicated that small businesses in the U.S. were satisfied with their key lenders as 88.4% said the fit was "good" or "excellent." Of the remaining group, 10.1% categorized the relationship as "fair" while 1% felt it was "poor." Fewer than 1% said the relationship was their "last resort."

The SBRB / Business Today study also indicated that relationships are lasting longer with more than 78.6% reporting they have been with their current principal lender at least five years. Comparatively, slightly more than 21% have been with their current primary lender four or fewer years. According to the report, 2.3% of the small businesses are in their first year with their current lead lender while 5.7% said their relationship is in the second year.

Of these same respondents, two-thirds said they were with their previous key resource for five years or longer before making a change while one-third said their prior relationship lasted four or fewer years.

Nearly 40% of the owners or managers said their business has a relationship with one lender and slightly more than 25% have a relationship with two lenders. The remaining 35% have concurrent relationships with three to five lenders. Questions about the quality of the relationships only pertained to the principal lenders.

Additionally, 48% of the respondents said their principal lending relationship is with a local bank and 17.4% said the relationship is with a regional bank. Another 26.2% reported a national bank is their chief lender. Foreign banks, non-banks, lending companies and those sources classified as "other" were cited by 8.4% as their lead lenders.

This is the first of a series of 11 SBRB / Business Today reports examining the current state of small business lending relationships and loan needs. Consecutive reports will detail loan activity, collateral requirements and cost and compliance pressures. The SBRB / Business Today Small Business Lending Relationship and Loan Requirements Study also will include reports with findings in seven distinct industries -- manufacturing, construction and contracting, retail, food and beverage, distribution and wholesaling, transportation and automotive.

Business Today Magazine is dedicated to serving the information needs of owners and managers of small businesses. The primary goals of the quarterly publication based in Buffalo Grove, Il. is to inform and educate its readers by providing timely, useful information that will help readers both contend with the daily demands of running their businesses as well as provide insight on achieving long term growth. Business Today Workshops also are conducted throughout the U.S. to provide educational resources for entrepreneurs and their managers.

The Small Business Research Board ascertains and reports attitudes on a wide variety of national and international issues that impact small businesses. These studies benefit owners and managers and also provide opportunities for third parties to gain real time insight into the attitudes of small businesses.

The latest information about the Small Business Research Board can be found at

For more information about this poll, results of previous studies or other matters related to the Small Business Research Board, please contact Raymond D. Minkus, (847) 441-4192.

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