It's the news we have all been waiting for—the economy is starting to show signs of recovery. Consumer confidence surged in November to its highest level since July, an indication that Americans may be more willing to spend. Holiday shopping figures for Black Friday and Cyber Monday were robust. The government jobs report on December 2nd announced that unemployment had fallen to 8.6 percent, its lowest level in two and a half years.
I am seeing a growing number of small business owners registering on our platform for funding. This is a good sign. Meanwhile, credit eased further in the past month. This has been a trend for most of the second half of the year.
The monthly Biz2Credit Small Business Lending Index, an analysis of 1,000 loan applications on Biz2credit.com, found that approval rates of financing requests by small banks and non-bank lenders increased to their highest levels of the year during November 2011.
The big story continues to be the growth of small business lending by credit unions, which granted 57 percent of small funding requests last month. Overall, alternative lenders—credit unions, as well as Community Development Financial Institutions (CDFI), micro lenders, and others—approved 62 percent of funding requests, a rise from the 61.8 percent during October.
Loan approvals by smaller banks jumped to 47 percent in November. Meanwhile, big banks, which have the most stringent criteria, approved 10 percent of small business loan requests for the first time since April. All of this is positive.
It's not just mom and pop shops that are searching for—and receiving—infusions of capital. Professionals such as doctors, dentists, CPAs, and lawyers are also increasingly looking to secure the funding they need to expand their practices.
As the 2012 election year approaches, we can expect President Obama to focus a sizable amount of attention on increasing small businesses lending and helping entrepreneurs grow their enterprises. The President has stressed that American entrepreneurship and business innovation will help lead us through the recent tough economic times. I couldn't agree more.
A frequently quoted expert on small business lending and recently named the Top Entrepreneur of 2011 by Crain’s New York Business, Rohit Arora is CEO of Biz2Credit, which connects small business owners with 300 lenders, credit rating agencies and service providers. Since 2007, Biz2Credit has secured $400 million in funding for small businesses in New York and across the U.S. via its safe, efficient online platform.