Page-2 | Small business lending on the uptick in January 2012 | Commentary | NewJerseyNewsroom.com -- Your State. Your News.

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Small business lending on the uptick in January 2012

With entry of bigger players in alternative financing, the cost of funding in this asset class has begun to drop from an average 27- 28 percent to 16-18. More and more players have joining alternative funding space, thus driving up competition and lowering overall barriers to credit access and lower interest rates. There is an increase in startups looking for funding, and many of their needs are not fully addressed by traditional lending institutions.

Banks with assets between $10 - $50 billion are starting to come back in the market, albeit cautiously. They are continuing to monitor the European financial crisis, as well as the U.S. debt debate. Additionally, toward the end of 2011, big banks tried to shore up their capital base and thus tried to reduce their outstanding loan portfolio.

Our analysis also found that loan request amounts ranged from $25,000 to $3 million; that the average credit score was above 680, and that average-time-in-business was slightly more than two years.

Unlike other surveys, these results are based on primary data submitted by more than 1,000 small business owners who applied for funding on our platform.

Rohit Arora is co-founder and CEO of Biz2Credit, an online resource that connects 1.6 million small business owners with 1,100+ lenders, credit rating agencies and service providers such as CPAs and attorneys via its Internet platform. Since 2007, Biz2Credit has secured more than $500 million in funding for small businesses in New Jersey and across the U.S.

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