Small Business Loans On Rise, Signals Economic Healing
The market didn’t look so hot earlier this year for small businesses. Despite murmurs of economic healing, small business loans were still tight, and didn’t look like they’d be opening up anytime soon. But now, loans are up for entrepreneurs, and it looks like the situation is only going to get better with Bank of America leading the charge.
Bank of America is investing in small businesses like never before, according to the Chicago Tribune. CEO Brian Moynihan pledged just seventeen months ago that the bank would increase its lending to small businesses, and its following through with his promises. In fact, new loans to businesses with less than $20 million in revenue increased by 20% back in 2011, to $6.4 billion, according to the bank’s reports. Businesses with less than $5 million in revenue saw a lending increase of 63% in the fourth quarter.
Bank of America is also hiring 1,000 small business bankers throughout the nation to provide better service to existing customers and to increase new business. That’s a sign of confidence.
“We have noticed a difference,” said Arthur Pue of Engineering Sales Associates. To his small family business, the bank is more accessible now. “My father had this company for 51 years. … He spent more time courting bankers than he did running the company.”
Economy watchdogs have been paying strict attention to the goings-on in the realm of small businesses, since business lending is a signal of recovery. Recent results have been encouraging with a 10% increase in 2011 after two solid years of decline, according to the Federal Reserve.
The increased availability of money to small businesses just makes practical sense. Businesses are able to increase their operation and earning power which stimulates the economy and creates (ding ding ding!) new jobs. See? Turns out the market works all on its own.