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Even as the economy showed signs of recovery in the wake of the Great Recession, lending to small businesses contracted last year, while large businesses received more loan dollars, a new government study shows.

In the year ended June 2011, banks had $606.9 billion in outstanding loans to the nation’s small businesses, down 6.9 percent, compared with $652.2 billion for the same 12-month period ending in June 2010, according to the recent annual report on small business lending by the Small Business Administration Office of Advocacy.

Small business lending has been declining since June 2008, when banks had $711.5 billion in loans outstanding to small businesses. The report noted that this trend is in part because banks are afraid to lend to smaller businesses and fewer companies are applying for loans.

To read the full article – Click Here – entrepreneur.com – July 23, 2012

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