Joe McClure, District Director
Montana District Office
U.S. Small Business Administration
Your success is our goal – that’s why this month I’m focusing on dispelling the myths of business loans and giving you tips and tools so you are well prepared when applying for a business loan. The Small Business Administration is here to help and give you a leg up on getting a small business loan.
A common misconception is that SBA loans money directly to small businesses. We do not. We do, however, guaranty loans made through local approved lenders. The SBA guaranty reduces the risk to the financial institution and may provide the lender with more flexibility in credit decisions. Contact your lender directly to apply for an SBA loan or visit our website to find a local SBA lender.
We recommend approaching the financial institution you currently do business with first. They have first-hand knowledge about you, your character and your history. If your bank says no, don’t be discouraged; think of it as an opportunity to shop around! Some lenders do not make certain types of loans, so although you may not qualify for a loan at one institution, you may be approved at another.
Manufacturing is a dynamic and changing industry. Explore and analyze the current state of manufacturing and its potential future direction. To this end, several manufacturing indicators are listed below to paint a picture. These indicators were chosen to represent a current snapshot of different dimensions of the industry and its performance. The indicators are updated as new data becomes available. Links to the sources of these indicators are provided when available.
American manufacturers are saying that business is booming, but many of them also say that banks aren’t keen to provide the loans necessary to hire more workers, buy new equipment, and ramp up production. According to Biz2credit, a New York firm that matches borrowers with lenders, a recent analysis found that loan approvals at large banks (those with $10 billion plus in assets) fell in April for the second straight month.
Banks are saying that they’re willing to lend but also admit that they are proceeding with caution, especially with loans to smaller, or contract manufacturers. Recent articles note that “the slow pace of the economic recovery is causing both borrowers and lenders to proceed with caution” and “ the slowdown in small-business lending is due to the March expiration of a temporary 90% guarantee on SBA loans and the reinstatement SBA loan fees that had been temporarily waived to stimulate lending.”
However, I would like to suggest that the continued tightness in business lending may be a reflection of banking strategies employed by different sized banks. Big national banks are much more likely to have been affected by the mortgage backed security mess and the subsequent increase in bank oversight and regulation has encouraged them to reduce risk and tighten lending. Smaller banks, meanwhile, which have traditionally made their living off of smaller loans that they carry on their own balance sheets, seem to have increased their small business lending.
Manufacturing Extension Partnership (MEP) helps local companies succeed in their efforts to develop new products, improve processes, and broaden their presence in the market.
For examples of how MEP centers are making a difference in your state, go to: http://ws680.nist.gov/mepmeis/SearchSS.aspx
It’s that time of year again.
May is World Trade Month, a time to reaffirm the important role that international trade plays in U.S. economic growth.
In today’s global economy, it is more important than ever for American businesses to tap into the abundance of opportunities overseas. 95 percent of the world’s consumers are located outside our borders; helping companies reach them is key to our nation’s economic success and future.