Business credit may be harder to get

The signs can be subtle, like a change in reporting requirements on a line of credit, or they can be quite blatant — the denial of a loan application. Some small business owners are finding that credit has become harder to come by or that lenders have imposed more stringent requirements in recent months, the likely result of an overall shrinking of credit amid a continuum of mortgage failures.

Roy DiMarco, president of Harrison Leifer DiMarco Inc., a Rockville Centre, N.Y.-based marketing and public relations firm, said that since his company’s line of credit came up for renewal recently, the bank is requiring monthly instead of quarterly financial updates. They don’t want to extend themselves too far. They want to keep their finger on the pulse, DiMarco said. I guess I don’t blame them. He’s also noticed that banks are requiring another layer of scrutiny on applications.

A bank employee now needs to get another second approval from his or her supervisor. They are being much more strict internally … for obvious reasons, based on the last three or four months. Getting credit can be hard for a small business, even in more secure times, and new enterprises often find it’s impossible to get financing from a bank. DiMarco has found smaller, community banks more welcoming for a small business than big national banks; he said they seem more willing to lend.

A nationwide survey by the National Federation of Independent Business of its members found that 7 percent of respondents reported loans were harder to get in recent months. That’s up from 5 percent in July, but NFIB Chief Economist William Dunkelberg noted that this is still a very low percentage. We can’t find anything that says people are having trouble, he said. Still, talk to some individual business owners, and they can supply anecdotal evidence of tighter credit.

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