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While Majority of Small Businesses View Relationships with Lenders
As “Good” or Better, Loyalty Remains Significant Issue,
Says Latest Small Business Research Board Study
21% of Small Business
Have Changed Principal Lending Relationships
Within Last Four Years
According to SBRB Report for “Business Today Magazine”
First of a
Series
NORTHFIELD, IL
(January 15, 2008) – The relationships small businesses have
with their principal lenders appear to be good and even getting
better, however 21% of the owners and managers participating in a
nationwide Small Business Research Board (SBRB) study said they have
found new lead providers within the past four years.
Owners and managers
of more than 450 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 88.4% said the fit was
“good” or “excellent.” Of the remaining group, 10.1%
categorized the relationship as “fair” while 1% felt it was
“poor.” Fewer than 1% said the relationship was their “last
resort.”
The SBRB / Business Today study also indicated that relationships are
lasting longer with more than 78.6% reporting they have been with
their current principal lender at least five years. Comparatively,
slightly more than 21% have been with their current primary lender
four or fewer years. According to the report, 2.3% of the small
businesses are in their first year with their current lead lender
while 5.7% said their relationship is in the second year.
Of these same respondents, two-thirds said they were with their
previous key resource for five years or longer before making a change
while one-third said their prior relationship lasted four or fewer
years.
Nearly 40% of the owners or managers said their business has a
relationship with one lender and slightly more than 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, 48% of the respondents said their principal
lending relationship is with a local bank and 17.4% said the
relationship is with a regional bank. Another 26.2% reported a
national bank is their chief lender. Foreign banks, non-banks,
lending companies and those sources classified as “other” were
cited by 8.4% as their lead lenders.
This is the first of a series of 11 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. The SBRB
/ Business Today Small Business Lending Relationship and Loan
Requirements Study also will include reports with findings in seven
distinct industries -- manufacturing, construction and contracting,
retail, food and beverage, distribution and wholesaling,
transportation and automotive.
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, 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.
# # #
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.
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