More small business will seek to increase their loan levels or lines of credit during 2008 according to the latest nationwide Small Business Research Board study.
Of the more than 450 owners and managers participating in the study, 26.8% said they will increase the dollar value of their loan requests or raise the limit on their line of credit in 2008. This is an increase of 3.5 percentage points from the 23.3% of the small businesses which increased their loans or line of credit in 2007.
Within the overall group of participants, 14% said they decreased their credit needs during the past 12 months while nearly 40% reported their loan amounts were unchanged. Furthermore, 23.2% said they had no loans or lines of credit.
During 2007, the majority of participants (53.1%) in the U.S. poll said they believed that access to credit was unchanged from the previous 12 months, while 27.1% said it was easier. Of the remaining respondents, 14.3% said they described access to credit as more difficult and 5.5% indicated that access to credit was impossible.
Although 26.8% will be applying for more credit during the next 12 months, 9.4% intend to reduce their credit needs. The remaining 63.7% will attempt to hold their credit needs at the current level.
The study also indicated that relationships are lasting longer with more than 78.6% reporting they have been with their principal lender at least 5 years or an increase from the 66.6% who said they had been with their previous key resource 5 years or longer.
Comparatively, slightly more than 21% have been with their current primary lender 4 or fewer years. The report showed 2.3% of the small businesses are in their first year with their current lead lender while 5.7% said their relationship is in the second year.