This year, community banks will be more likely to lend to small businesses than they were last year, according to a study by Sageworks, meaning that entrepreneurs incorporating a business can once again look locally for funding. This is especially good news for new and small businesses looking for growth opportunity.
The study found that 58 percent of community banks plan on making more commercial loans in 2011 than they did in 2010. Approximately 38 percent of lenders said they would make the same number of loans and 11 percent said they were less likely to approve loans. For small U.S. banks, these results come as a sign of further economic recovery.
For owners who may be looking at business incorporation as part of their growth strategy for 2011, this comes as great news. For owners who may be looking business incorporation as part of their growth strategy for 2011, this comes as great news.
In comparison to large banks, small community banks generally have under $1 billion in total assets and operate within a smaller region, according to the study. They often rely on real estate and small business lending for income, both of which all but disappeared during the economic recession, when home sales dropped and foreclosures rose. Since 2007, 340 U.S. banks have failed, the study reported. The majority of those banks were small, community banks. Facing these issues, community banks are once again turning to the small business owners in their local areas for partnerships…and that can only be good news.