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Small Business Brief - Large loans to businesses rebounding faster than small loans

August 19, 2014 by Gary Stockton

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Our stories this week include:

  • A new report from the Federal Reserve Board on small business lending trends.
  • Other interesting findings from the Brookings Institute on new business startup trends.
  • Experian's upcoming Quarterly Business Credit Review and Q2 credit trends.
  • Small Business Tool Box - A new tool to help you make stunning slide presentations.

Large loans to business are rebounding faster than small loans

Fed-Report-on-Loans

Following the financial crisis, total outstanding loans to businesses by commercial banks dropped off substantially. Large loans outstanding began to rebound by the third quarter of 2010 and essentially returned to their previous growth trajectory while small loans outstanding continued to decline, according to a new paper from the Federal Reserve Board titled “Business to Business Credit to Small Firms.”

The paper references the Experian/Moody’s Analytics Small Business Credit Index as a resource in addition to recent polls by the Credit Research Foundation. According to the paper, there has been an increase in demand for trade credit over the past year, as well as a slowdown in payments that may signal a decline in small business’ ability to pay. Please see a link to the paper below.

U.S. economy being driven by older firms - fewer startups being created

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Like the population, the business sector of the U.S. economy is aging. New research from Brookings Institute shows an increase in the share of economic activity is occurring in older firms compared to younger firms across the United States.

The share of firms 16 years or older was 23 percent in 1992, but leaped to 34 percent by 2011, an increase of 50 percent in two decades. The share of private-sector workers employed in these mature firms increased from 60 percent to 72 percent during the same period.

Small business credit conditions improved in Q2 erasing Q1 setback

Experian/Moody's Analytics Q2 2014 Small Business Credit Index Experian/Moody's Analytics Q2 2014 Small Business Credit Index

The Experian/Moody’s Analytics Small Business Credit Index measures credit quality for firms with fewer than 100 workers. The latest report shows -business credit conditions improved in the second quarter of 2014, gaining 2.4 points to hit 112.2 from a revised 109.8 in the first quarter.

Credit balances and the number of trades each expanded in the first quarter, accompanied by a decline in the delinquency rate. Strong job growth
accelerated significantly from the first quarter, and GDP grew at 4%.

Experian and Moody’s will discuss key findings from the most recent Small Business Credit Index in Experian’s next Quarterly Business Credit Review webinar taking place on Thursday, September 4th. Click here to register to attend.

Small Business Tool Box

Small business owners and entrepreneurs are always looking for useful tools, websites and apps to stay ahead of the tech curve. This week's “Hot Tool” is Haiku Deck.

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The challenge with business presentations is resisting the urge to give your audience information overload with a lot of text and clutter. Haiku Deck allows you to create a quick and easy slide deck online (or via an iPad app).

It makes beautiful slide shows in no time and makes your iPad a more productive tool. It’s a very well thought out product, integrating a huge library of stock photography through creative commons, and tools to make dropping a chart or graph into a slide effortless. Once your presentation is published you can easily share it on social networks, or embed it into your blog with just a few clicks. To learn more, visit haikudeck.com.

That’s the Small Business Brief for this week. Before we sign off, remember, small business is the engine of our economy, so get out there with your wallet and rev it up America! Also, be sure to subscribe to our channel to be notified of our next Small Business Brief. Thanks and we’ll see you next time.

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