Small Business & SBA News You Need To Know – March 8, 2016
In Rhode Island, the SBA saw a 55% surge in lending. About $55MM in SBA 504 and 7(a) loans were made during the first four months of the federal fiscal year (October 2015 to January 2016). Last year the total was about $30MM for the same period. Mark Hayward, district director of the U.S. Small Business Administration’s Rhode Island office, told the Providence Journal that he was encouraged to see a surge in manufacturing. “They are starting to come back, ranging from existing ones, some family-owned, to brand new startups,” he said. Hayward also said that women are starting businesses at twice the rate as men and that the SBA is doing more to help veterans.
Small businesses are having an easier time getting financing. According to the Federal Reserve’s 2015 study on small business credit, approval rates were better in 2015 than the year before. “Eighty percent of small businesses that sought financing got it, compared with 65% the previous year,” reported Forbes. Revenue growth and profitability were also up. The Fed surveyed 3,500 employer firms in 26 states for its report.
Small businesses are also borrowing at a lower rate. Even though the percentage of loans approved for small businesses has increased, a new report shows that the number of small businesses seeking financing has contracted. According to Reuters, the Thomson Reuters/PayNet Small Business Lending Index registered 118.2 in January, the lowest level since November 2014. “This is a dramatic form, an extreme form of hunkering down,” said Bill Phelan, president of PayNet. There is a direct correlation between small businesses and the health of the economy. According to the story, the index “typically corresponds to U.S. gross domestic product growth one or two quarters ahead.”
8+1 (That’s 9) Things You Need To Know