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Small businesses borrowing at increasing rates

Nov 27, 2012 Quinn Thomas

Short term lenders can breathe a sigh of relief, as small businesses appear to be borrowing again. A recent report by Biz2Credit revealed that small banks approved more than half of small business loan applications in the past year, marking the first time that number has exceeded 50 percent since before the recession. Meanwhile, loan approvals for big banks hit a record at 14.8 percent, the highest since Biz2Credit began keeping track in 2011, while alternative lenders approval ratings also reached an all-time high of 64.7 percent.  "Because they offer quick approvals, alternative lenders are becoming an increasingly viable option for small business borrowers," said Rohit Arora, CEO of Biz2Credit. "This type of financing works well for small and mid-sized businesses that encounter short-term cash flow issues." At the same time, small businesses could be keeping debt collection agencies busy in the near future. According to a recent survey by the National Federation of Independent Business, which polled more than 2,000 small business owners, 30 percent of respondents said they borrow regularly. The study found that small business owners' optimism index score rose slightly from September to October, increasing from 92.8 to 93.1.