| Central Penn Business Journal
Got the borrowing willies? You're not alone
About two thirds of American small business owners surveyed by the Federal Reserve Bank of New York claimed they didn't apply for credit in Q1 this year.
Twenty-seven percent said it was because they worried about being rejected; 19 percent already were paying down debt; and 21 percent said they were good with the credit they had. The Fed survey, administered in April and May, polled 876 firms in the New York metro area.
The economy, until quite recently, has been slowly recovering; however, what does it say if most small businesses are not borrowing — and worse, because they're afraid they won't qualify?
MultiFunding LLC recently posted the results of a similar study, which found 73 percent of its respondents needed a loan but didn't apply. Of the 1,200 small businesses it surveyed, 21 percent said they didn't apply because they're afraid they'd be rejected or were working on their credit.
We've been told repeatedly by bankers they have plenty of money to loan; however, increasingly we hear that money's harder and harder to get.
How does the economy grow if money isn't being borrowed? And what do these studies say about American banking if they're even afraid to fill out the application?
Christopher Passante is the editor of the Central Penn Business Journal.