Survey Says Credit Not an Issue for Small Businesses

Despite tougher bank lending policies, the availability of credit isn’t a major issue yet for small businesses, according to a national survey being released today.

The finding by the National Federation of Independent Business contrasts with complaints from some larger and more capital-intensive firms that bankers are cutting credit to good customers because they’re worried about the slow economy.

The NFIB survey, taken last month, also showed that its members had regained some of the confidence lost after the Sept. 11 attacks. The percentage of firms expecting business to be better in six months rose to 24% of those surveyed, up from just 10% in a similar survey immediately after the attacks. The Washington-based NFIB is the nation’s largest lobbying group for small businesses, with 600,000 members.

Although a Federal Reserve report this week showed that banks are tightening lending standards, the latest NFIB survey indicates that credit was a concern to only 2% of its members. Far more important were issues such as taxes, poor sales and the availability of qualified labor.

NFIB economist Bill Dunkleberg said one reason credit hasn’t emerged as an issue is that many small businesses have put hiring and expansion plans on hold, so there hasn’t been a lot of demand for loans. Many are tapping into the strong cash reserves from the long boom of the 1990s, he added.

But Dunkleberg said the tighter credit detected by the Fed survey may not be felt by small businesses until months later as lending policy changes take effect.

“I think we’re ahead of the curve on this one,” said Hank Cox, spokesman for the National Assn. of Manufacturers.