April tends to bring showers to prep for May flowers but onefirm reported that credit unions and banks experienced a slightdrought in business loan approvals.
|According to Biz2Credit, a New York firm that links lenders with smallbusiness owners, loan approvals made by credit unions decreased by0.5% to 46.6% in April. Banks dropped from 10.9% in March to 10.6%in last month.
|Biz2Credit tracked 1,000 loan applications and published thedata in its small business lending index.
|The firm also found that the 12-month window for the SBA'senhanced 90% loan guarantees recently came to an end, which slowedSBA lending activity reported by banks that make SBA-backed loans.The guarantee fee, which is usually 1% to 3% of the loan amount,was no longer waived and increased the cost of taking out a loan,according to Biz2Credit.
|Rohit Arora, CEO of Biz2Credit, said another factor that mayhave led to a slowdown in business loan approvals was the Apriljobs report, which showed that only 115,000 new jobs were createdlast month.
|High oil prices, the European crisis and a slowdown in the flowof capital have also combined to cause both borrowers and lendersto proceed with caution, Arora noted.
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