SBA Hot Topic Tuesday — Small Business Loan Demand Rising says SBA

SBA Hot Topic Tuesday — Small Business Loan Demand Rising says SBA
November 5, 2024
By Bob Coleman, Founder & Publisher

From SBA’s Office of Advocacy October 2024 report

Small business credit conditions remain tight following COVID-19. 

Borrowing conditions changed as rising interest rates increased costs for small businesses reliant on banks for their funding needs. Commercial bank lending standards became more strict in mid2022 as the federal funds rate had 11 consecutive increases over 18 months 

Credit remained available to businesses, but at higher costs which dampened financial activity. Surveys indicated a weak demand for small business loans (Figure 2). 

The total small business loan balance amounted to over $1.3 trillion in 2023—$657 billion in business loans outstanding for loans of $1 million or less, another $653 billion worth of credit from finance companies, and the rest from other sources (Figure 3).