HOME  SURVEYS UNITED STATES U.S. Business Issues Higher Loan Rates, More Pressure for Personal Guarantees
Higher Loan Rates, More Pressure for
Personal Guarantees Have Greatest Impact on Small Businesses
Relationship with Lenders, Says Latest Small Business Research Board
Study
Fourth of a Series
NORTHFIELD, IL (January 18, 2008) – Higher loan rates and
increasing pressure to provide personal guarantees are the two greatest
factors impacting the relationship of small businesses with lenders,
according to a nationwide Small Business Research Board (SBRB) study.
The report issued today indicates that 24% of those responding to The
SBRB / Business Today Small Business Lending Relationship and Loan
Requirements Study contend higher rates are having the most significant
impact on their business. More pressure and demands for guarantees
was identified by 16.1% of the respondents as the second most
significant factor.
The SBRB report co-sponsored by Business Today Magazine was solely
focused on examining issues related to small business and their
relationship with lenders. More than 450 owners and managers
throughout the U.S. participated in the study.
The study also indicated that greater expenses to obtain a loan (listed
by 15.3%), stricter covenants (14.4%) and increased covenants (14%)
also were among the top five lender related issues. They were followed
by greater expenses required to comply with loan requirements (9.3%)
and the need to upgrade to an audit (6.7%).
Higher loan rates were cited in five of the seven key industries
tracked by the SBRB -- construction and contracting, retail, food and
beverage, distribution and wholesaling and automotive. Greater demands
for personal guarantees was the leading concern among the manufacturing
companies. In the transportation industry, stricter covenants were the
greatest concern.
This is the fourth in a series of 11 SBRB / Business Today reports
examining small business lending relationships and loan needs. The
first report indicated that small businesses in the U.S. said their
relationship with key lenders was “good” or “excellent” and that
relationships are lasting longer.
The second report related to overall 2007 loan needs and anticipated
2008 credit requirements. The report found that 26.8% will raise their
loan requests in 2008 for an increase of 3.5 points from the 23.3% of
the small business which elevated their loan levels in 2007.
The third report conveyed information about the use of residences as
collateral for business loans. Of those business owners indicating
that they use their home as collateral, 42.4% said their lenders had
amended their borrowing levels with two-thirds (66.7%) of the
respondents receiving higher credit ceilings and the balance receiving
lower credit limits.
Subsequent reports will detail findings in the seven distinct industries.
Business Today Magazine is dedicated to serving the information needs
of owners and managers of small businesses. The primary goal of the
quarterly publication based in Buffalo Grove, Il. is to inform and
educate its 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 also are conducted throughout the U.S. to
provide educational resources for entrepreneurs and their managers.
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.biznus.net.
# # #
© 2008 Small Business Research Board
For more information about this poll, results of previous studies or
other matters related to the Small Business Research Board, please
contact Raymond D. Minkus, (847) 441-4192.
|
|
