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Main Street Monday — Main Street Leads US Economy

September 10, 2018

By Bob Coleman
Editor, Main Street Monday

Main Street Monday — Main Street Leads US Economy

The SBA Quarterly Bulletin released in March of this year confirms that small businesses continue to experience growth.

Financial Takeaways:

Low demand for small business loans and lending remain areas of concern. Bankers report easing lending standards and weak demand for small businesses loans.

While overall business lending (including commercial, industrial and commercial real estate) has been up since post-Great Recession, small business lending (loans < $1 million) is still below 2008 peak.

  • As borrowers seek out low credit costs, loan approval rates for small businesses through traditional lenders continues to improve. Alternative lending source continue to accommodate small business loans at higher rates of interest.
  • For loans under $100K, the loan spread remains low, while the prime (rate used as a baseline to determine business loan rates) has been rising steadily in 2017.
  • Proprietors’ income is now in its 9th year of steady growth, after an initial post-recession jump.

Other Highlights:

  • The number of new businesses/firms, jobs and income is growing steadily.
  • The number of small businesses is growing steadily, overtaking the 2007 record level.
  • Compared to their large business counterparts, small businesses consistently created new net jobs over the last 5 years. The creation of 2 out of 3 net new jobs resulted in small businesses topping large businesses in 15 of the last 20 quarters.

The higher survival rate of more new employer businesses vs. the number of new employer business deaths resulted in gains every quarter since approximately mid-2010 (post-recession).

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