Small business funding is drying up. This means that small enterprises are facing difficulties in securing business funds as banks are tightening their lending criteria. Recently, the Federal Reserve conducted a survey regarding bank lending practices, asking for opinions from senior loan officers. According to the report, despite there being little change in actual loan demand for commercial and industrial loans, banks have significantly tightened their approval standards. Even though loan demand is weakening, the report indicates that the criteria for commercial real estate loans have also been tightened. High interest rates, of course, influence the decisions of both lenders and business owners. As a result, in the coming month...

정도면은 제롬 파월이 연준 의장이 금리 인하를 단행할 것이라는 기대를 하고 있습니다. 그렇기 때문에 하반기 상황은 다소 변화의 여지를 두고 있다고 전하고 있습니다. 그럼에도 불구하고, 이와 관련한 전문가들은 연준이 다음 달 회의에서 금리를 인하하기 시작하더라도 기업주들이나 소상공인들이 즉각적으로 금리 완화 또는 대출 기준의 완화를 기대해서는 안 된다고 강조했습니다. 특히 신규 사업가들은 어려운 상황에 직면했을 때 계획을 마련할 수 있도록 항상 주의해야 한다고 조언했습니다. 이번 연준 보고서에 따르면, 기업 대출을 강화한 은행들은 경제 전망이 덜 우호적이거나 불확실한 점, 산업별 문제 악화 위험에 대한 내성의 감소, 입법부의 어떤 분위기 변화, 감독 조치 및 기타 문제에 대한 우려가 증가하고 있다고 밝혔습니다.

I mentioned that the reason for significantly tightening the standards is that, as a result, small businesses are experiencing great difficulties in obtaining new loans, and this difficulty is expected to increase. Additionally, it is said that the existing credit limits are also being reduced. Therefore, this financial environment is placing a significant burden, especially on new business owners, and due to this lack of funds, delays in business expansion or infrastructure investment are unavoidable. The speaker revealed this situation. 

So, how exactly have the lending standards been tightened? According to the report on the opinions of officials regarding the lending practices of the FRB, the first method is the reduction of credit limits. Banks have lowered the credit limits for loan applicants. As a result, the amount of loans that were previously allowed and the potential amount of credit available have decreased.

This means that these companies have limited access to funds by reducing the amount of capital they can access. Secondly, there is the strengthening of collateral requirements. This indicates that the standards for collateral needed to obtain loans have been raised. Banks, of course, require more assets as collateral to increase the stability of loans, or they apply stricter evaluations of the value of collateral assets. Furthermore, the third point is that the loan approval process has become more stringent. This means that more documentation and information are required, and the review process has been conducted more thoroughly. Therefore, it reflects that banks have strengthened their assessment criteria in response to concerns about companies' financial conditions and economic forecasts. Consequently, these changes are measures taken by banks to reduce risks associated with lending, especially in light of economic forecasts.

It is said that things are becoming even more difficult in uncertain situations. On the other hand, despite the challenging circumstances surrounding business funding, small business owners are not in a state of complete despair, which is a positive piece of news. There is a belief that access to the small business loan marketplace, particularly through Lendio and other capital sources, will improve. This is seen as a positive predictive factor. However, despite this, 65% of respondents indicated that the current loan conditions and the funding amounts did not meet their expectations. This shows that they are not very satisfied with the current options available to them. Additionally, about 67% of respondents mentioned that they do not have a preferred type of lending institution, and half of them...

They responded that they do not even know what financial solutions the bank they are dealing with offers. Generally, they prefer loans with low interest rates, as well as low regular rates and long-term SBA loans. Ultimately, this means that there are increasingly stringent criteria for general loans from commercial banks. On one hand, business owners are either unfamiliar with or do not prefer the conventions and regulations surrounding traditional bank loans. Therefore, what remains is the SBA loan. Considering this situation, the SBA announced its position, stating that it is working to meet the demand for small business loans that traditional commercial banks are hesitant to provide. In fact, the SBA has a broad reform program.

Thanks to adjustments, more small business owners can access SBA loans. For example, the number of loans for Black-owned businesses has more than doubled compared to before the pandemic. Additionally, loans for minority groups, including Latinx and women-owned businesses, have also increased by more than double. Recently, as bank loan assessments have become stricter and funding has dried up, the SBA is looking to take a more active role. Therefore, it would be wise to explore various SBA loan programs. Recently, individuals who received SBA loans in the past have been inquiring about options for refinancing or other assistance. Now is the time to stay informed about the SBA climate in the lending market and to contact your SBA loan officer.

I think it would be a good opportunity to check and see if there is anything I can get help with.

스몰비즈니스

미국 진출에 관심이 있는 개인, 기업에게 다양한 법률, 세무, 자산관리 도움을 드리고 있는 미국 변호사, 회계사 존청입니다.

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