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3 Things You Should Know About Small Business: Jan. 9

NEW YORK ( TheStreet) -- What's happening in small business today?

1. Small-business confidence up -- barely. It should come as no surprise that small-business owner confidence didn't have a large rebound in the final month of 2012. According to the National Federation of Independent Business' Small Business Optimism Index, while owner optimism rose 0.5 from November's historically low report to 88 -- it was the second-lowest reading (behind November) since March 2010.

December's poor report resulted largely from a deterioration of labor market components, and the surprising percentage of owners who still expect business conditions to worsen in the next six months, the NFIB says.

"The 11th-hour [fiscal cliff deal] has brought marginal certainty about tax rates and extenders and will provide some relief to owners, but it certainly doesn't guarantee a more positive forecast for the economy," said NFIB chief economist Bill Dunkelberg. "The January survey results will be far more enlightening about how the sector views the deal -- higher taxes and minimal spending cuts may not be a panacea. And let's not forget what is looming on the horizon: a debate over the debt limit and a regulatory avalanche of historic proportions about to spill out into the country. Happy New Year."

December's reading is certainly not typical during a recovery, NFIB says. Seventy percent of owners surveyed characterized the current period as a bad time to expand; one in four of them cite political uncertainty as the top reason. Taxes and regulation rank as the top two business problems, with "poor sales" as a close third, the index found.

2. Small-business lending by big banks jumps in December. Loans approved by large banks to small companies rose 13% last month, according to the Biz2Credit Small Business Lending Index. The 14.9% approval rate at big banks (those with more than $10 billion in assets) is the highest recorded by the index and marks a significant jump from the approval rate in November as well as the 9.7% approval rate in the year-earlier period.

"After a hiccup in November, big banks are coming back strong into the small-business lending game," said Rohit Arora, Biz2Credit co-founder and CEO, who oversaw the research. "When we look at how difficult it was to secure capital from large banks a year ago, we can see just how much the lending landscape has improved during all of 2012."

Community bank approval rates also increased in December, climbing to 49.8% from 49.2% in November and 47.1% a year earlier, the report found.

That said, credit union loan approvals to small businesses slipped once again to 47.6% from 48.4% in November - the seventh consecutive monthly drop in approvals. Alternative lenders - accounts receivable financers, merchant cash advance lenders, Community Development Financial Institutions (CDFI), microlenders and others - dipped for a second straight month to 63.8%, down from 64.5% the previous month.

"As banks opened up the spigots, lesser quality borrowers approached alternative lenders for money. Although alternative lenders are known for their speed and flexibility, the drop in their approval rates seem to indicate they are doing their due diligence and rejecting applicants deemed too risky," Arora said.

3. An interview with B Labs' Jay Coen Gilbert. Social Good Network interviewed Jay Coen Gilbert, entrepreneur and co-founder of B Lab, the nonprofit organization behind the B-Corp. certification, a designation to recognize businesses that meet standards of social and environmental performance, accountability and transparency.

To date, 650 companies use the B-Corp. certification, including well-known names like Etsy, Ben & Jerry's, Patagonia and Cabot Creamery. Twelve states have already added an official benefit corporation to their legal incorporation offerings, with another 16 states with forward-moving legislation to do so, according to the article.

"Legislation has enjoyed overwhelming bi-partisan support ... because the legislation is 100% voluntary and costs states nothing. Benefit-corporation legislation not only gives businesses the freedom and legal protection to pursue the triple bottom line, but it gives individual citizens something positive for which to advocate," Gilbert says. "The only remaining question is when Delaware, the home of corporate law, will hop on board -- and if they don't, how many companies, like Etsy and method, will leave."

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to:

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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