February 23, 2009 18:12 ET

While Majority of Small Businesses View Relationships With Lenders as "Excellent," Decreases in Loan Limits Are a Significant Issue, Says Latest Small Business Research Board Study

45% of Small Businesses That Use Their Residence as Collateral Have Experienced a Decrease in Loan Limits According to SBRB Report for Business Today Magazine

First of a Series

BUFFALO GROVE, IL--(Marketwire - February 23, 2009) - The relationships small businesses have with their principal lenders appear to be good and even getting better, however 45% of the owners and managers participating in a nationwide Small Business Research Board (SBRB) study that use their residence as collateral said they have experienced a decrease in loan limits up to 10%.

Owners and managers of more than 500 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 78% said the fit was "good" or "excellent." This is a drop of 10 points from the previous lending survey conducted in the fourth quarter of 2007. Of the remaining group, 20% categorized the relationship as "fair," a 10 point increase from the previous lending report, and 1% felt it was "poor." Less than 1% said the relationship was their "last resort."

The SBRB/Business Today study also indicated that relationships are lasting longer, with more than 77% of respondents reporting they have been with their current principal lender at least five years. Comparatively, slightly more than 23% have been with their current primary lender four or fewer years. According to the report, 11% of small businesses are in their first year with their current lead lender; this is an increase of nine points from the previous lending study conducted in the fourth quarter of 2007. 6% said their relationship is in the second year.

Of these same respondents, more than one-half said they were with their previous key resource for five years or longer before making a change, while 47% said their prior relationship lasted four or fewer years.

Nearly 40% of the owners or managers said their businesses have a relationship with one lender and 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, 52% of the respondents said their principal lending relationship is with a local bank and 18% said the relationship is with a regional bank. Another 22% reported a national bank is their chief lender. Foreign banks, non-banks, lending companies and those sources classified as "other" were cited by 9% as their lead lenders.

This is the first of a series of four 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.

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

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

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