NEW YORK (MainStreet) --For all the talk about how tight the small business lending market is and how difficult it is to get the big U.S. banks specifically to extend credit, Bank of America (BAC) says that view doesn't reflect business reality.
In fact, in a conversation with TheStreet expanding on a recent small business loan survey, a Bank of America executive says it's business owners who may not be taking advantage of available credit.
Earlier this month, Bank of America released its inaugural Small Business Owner Report, a semi-annual survey about the health of the small business community. The survey included a national sample of 1,000 business owners with revenue of $100,000 to $5 million and a maximum of 99 employees
It found that 78% of those surveyed who applied for a loan within the past two years were approved, however, owners may not be taking advantage of their lines of credit to meet their business objectives.Of the approximately 64% of the respondents who have an open line of credit today, half have earmarked the money for emergency purposes only, rather than using it as day-to-day capital. Twenty-three percent said they were trying to pay down debt so there was available capital to use, while 19% said it was their primary source of business cash flow. Bank of America was one of 13 big bank lenders that agreed in September to increase lending to the nation's smallest businesses by a combined $20 billion over the next three years, according to the U.S. Small Business Administration. The commitments represented an increase of 10% or more above the banks' current levels of lending, the SBA said. The other banks were Citigroup (C), Royal Bank of Scotland's Citizen Financial, Huntington Bancshares (HBAN), Key Corp (KEY), JPMorgan Chase (JPM), M&T Bank (MTB), PNC (PNC), Regions Financial (RF ), SunTrust Banks (STI), TD Bank, Wells Fargo (WFC) and US Bancorp (USB). BofA also committed to hiring 1,000 small business bankers across the nation. Robb Hilson, a small business executive for Bank of America, recently spoke with us about the relationship between small business owners and the big banks...
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