A third of the region's small businesses polled this spring sought credit in the first quarter, and two-thirds of those were at least partly successful, the Federal Reserve Bank of New York said Thursday.
In a similar poll conducted last year, demand for loans was greater, with 59 percent of the respondents saying they had applied for credit. But the approval rate was lower, at about 50 percent.
In both surveys, most of the approved applicants said they got less credit than they asked for.
The New York Fed's Small Business Borrowers Poll is the third in a series of surveys to help officials gain a deeper understanding of the long-running credit crunch and small business loan demand in the region.
The information could be used by policymakers to devise job growth initiatives. The agency said it polled more than 850 businesses, including more than 100 in northern New Jersey.
Some small business lending trends are contradictory, and the underlying causes of the lending decline are unclear, according to the regulator.
While recent surveys indicate banks have eased underwriting criteria, data also show a 10 percent decline in small business lending in the past year, the agency said in a summary of the poll results posted on its website. "The extent to which this drop is due to weak demand, impaired creditworthiness, or other factors is still under discussion," the regulator said.
The agency said a key poll finding was that two thirds of the businesses reported stable or increased sales, which was an improvement over last year. But that did not translate into employment growth as 15 percent of the businesses said they added employees in the first quarter while 16 percent said they had fewer employees. The rest reported no change.
The poll showed the approval rate for vehicle and equipment loans was relatively high at 71 percent. Approval rates for extensions of existing lines of credit, new business credit cards, and new lines of credit were much lower, at 52 percent, 44 percent and 33 percent, respectively.
Many small businesses said they did not apply for loans because they had low credit scores or insufficient collateral, and expected to be rejected.
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