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The Great Recession that happened in the United States in the year 2007-2009 affected the lending capacity of both minor and major banks across the nation. Since both large and small businesses were affected by the Downturn, banks tightened their qualifications as well as their rules and regulations in granting loans especially for risky small businesses. Large businesses gain more advantage since they already have proven records of commitment in repayments, but majority of small businesses do not have that luxury. Add to fact that a lot of banks closed during the Recession, it even narrowed down the options for small business owners to be qualified for a loan.
Five years later and as the whole world recuperates from the Downturn, the economy is slowly picking up again with the help of the United States Federal Government stepping up. New data shows that small businesses are getting the loans that they need as banks start to lend funds once again. According to Robb Hilson, small business executive for Bank of America, “The environment to lend money is much better today than it was two to three years ago." He also added that personal financial statements and cash liquidity improved in 2013.
The Bank of America hired 1,000 small business bankers and Wells Fargo added nearly 2,000 small business loan specialists to increase network due to the organic growth of the lending industry.
As stated by Lisa Stevens, lead executive for small business for Wells Fargo, "We are seeing an improving economy and better balance sheets and cash flow, but some business owners are cautious about hiring and taking on new debt." Because of the trauma of small business owners from the Great Recession in 2007-2009, fear may have griped them from getting a loan again.
"If you are lucky enough to be in the top 10 percent of small businesses, banks will fight to give you loans, but it's not any different than during the recession," says Ami Kassar, founder and chief executive of Multifunding, a small business loan brokerage.
Kassar also mentioned that major banks are now more aggressive in tapping the most successful small business owners with credible balance sheets and income statements to encourage them to get a loan and expand their business opportunities.