SOURCE: Small Business Research Board

March 04, 2009 12:25 ET

More Small Businesses Report Loan Level Access More Difficult or Unchanged, Says Latest Small Business Research Board Study

More Than Half of Small Businesses Indicate They Use Their Residence as Collateral, According to Latest SBRB Report for Business Today Magazine

Second of a Series

BUFFALO GROVE, IL--(Marketwire - March 4, 2009) - Most small businesses expect their loan levels or lines of credit to remain unchanged during 2009, according to the nationwide Small Business Research Board (SBRB) study released today.

Of the more than 500 owners and managers participating in the SBRB study co-sponsored by Business Today Magazine, 25% said they will increase the dollar value of their loan requests or raise the limit on their line of credit in 2009. This is an increase of one point from the 26% of small businesses that increased their loans or line of credit in 2008. 58% reported that their line of credit will remain unchanged.

Within the overall group of participants, 21% said they decreased their credit needs during the past 12 months; this was a drop of 20 points from Q4 2007. Nearly 50% reported their loan amounts were unchanged. Furthermore, 12% said they had no loans or lines of credit, a decrease of 11 points from Q4 2007.

During 2008, the majority of participants (49%) in the U.S. poll said they felt that access to credit was unchanged from the previous six months, while 12% said it was "easier." Of the remaining respondents, 35% described access to credit as "more difficult" and 5% indicated that access to credit was "impossible."

While 25% will be applying for more credit during the next 12 months, 17% intend to reduce their credit needs. The remaining 58% will attempt to hold their credit needs at the current level.

This is the second of a series of four SBRB/Business Today reports examining the current state of small business lending relationships and loan needs. The first report clearly indicated that the relationships small businesses have with their principal lenders appear to be good and even getting better; however, the 45% of owners and managers that use their residence as collateral said they have experienced a decrease in loan limits up to 10%.

The first report also revealed that 47% have been with their current primary lender for four years or less. The report showed 26% of small businesses responding are in their first year with their current lead lender, while 9% said their relationship is in the second year.

The last two reports to be issued shortly will detail collateral requirements and cost/compliance pressures.

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, Ill., are to inform and educate 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 are also conducted throughout the U.S. to provide educational resources for entrepreneurs and their managers. Their Web site can be found at www.ipabusinesstodaymagazine.com.

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 www.ipasbrb.net.

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