The National Small Business Association (NSBA) recently released a study that shows that small businesses continue to struggle to find funding. The NSBA, which supports raising the Member Business Lending (MBL cap, points out that the study shows that small businesses are happy with a credit union, when they work with one.
The reports highlights that small businesses have been "exacerbated in recent years." About 43 percent of small-business respondents indicated that in the past four years, their loans or lines of credit were reduced. Nearly one in 10 had their loans or lines of credit called in early by their bank. Of those who experienced the early loan call-in, 19 percent were given fewer than 15 days.
The report states that "Given that the average balance on a loan or line of credit is $265,060, 15 days is a death sentence for most small business. Adding insult to injury, 60 percent of those who reported changes in their loans or lines of credit stated that the reason was due to the bank's internal risk assessment, and 15 percent weren't even given a reason."
The survey showed that 60 percent of small businesses responding to the survey did business with a large bank, only credit unions and small community banks received a majority overall positive rating by respondents. Credit unions received a 60-percent positive rating; small banks, 73 percent, and large banks, 47 percent.