Good news for small-business owners: The loan environment is improving.
Small-business lending locally and nationally is on the upswing, members
of the banking community say.
"We are definitely in a recovery stage, and the graph is an extreme
positive spike," said Lester Romero, an assistant vice president at Wells
Fargo Bank.
During the first three quarters of 2012, Wells Fargo saw a national
increase of $11.4 billion in small business primary loans. Romero said he
expects the upward trend to continue next year.
Lending to small businesses nationally rose 11 percent from September to
October, according to the Thomson Reuters/PayNet Small Business Lending Index.
Local bankers say the steady increase is helping Nevada's economy
recover.
Alfred Soboyejo, senior vice president for small business banking at Bank
of America, said 2012 was marked by solid growth in small-business lending in
Nevada.
"The Las Vegas market has been resilient, and clearly we're moving in the
right direction," he said.
Soboyejo said his team approved loans worth $155.1 million between Jan. 1
and Oct. 31, a 23.6 percent increase from the previous year. Soboyejo credits
low interest rates and the stabilizing commercial real estate market for the
increase in lending.
"Those are really good signs that the economy is getting better," he
said.
Bruce Ford, a senior vice president at City National Bank, agreed.
"If there's a silver lining to the economy that has been down, it's that
real estate prices came down," he said.
Ford said his company has seen an overall increase in loans from
September 2011 to September 2012, from $12.2 billion to $13.7 billion. He said
he expects in-state small-business lending to increase next year.
"We believe it has grown because the economy is recovering," he said.
Ford said City National hopes to aid in the recovery by making loans more
accessible.
"We have been on a real campaign to loan out these funds," Ford said.
Increased lending helps keep jobs in Nevada, a good thing for everyone,
said Cassaundra Johnson, director of sales at Nevada State Bank.
"If we keep our small businesses operating, we're keeping people
employed," she said.
As for criticism that banks have held back approving loans for the
smallest businesses, Soboyejo said a lack of sufficient cash flow makes banks
hesitate. Johnson said lending to microbusinesses, which she defined as those
with less than $1 million in revenue, remains difficult, especially if the
company lacks cash flow.
"Sometimes it's not the size of the company or how many employees you
have, it's how much in reserves you have," she said.
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Distributed by MCT Information Services
