LEHI,
Utah, July 25, 2024 /PRNewswire/ -- U.S.
small business lenders increased requirements to qualify for
financing in the first half of 2024, but are cautiously optimistic
the market will improve, according to the Q1 2024 SMB Lending Index
released today by Lendio.
Lendio's SMB lending index measures how accessible business
financing is to small business owners with a higher score
indicating greater accessibility. The score is based on the
business profile of the 18k+ small businesses offered financing in
Lendio's marketplace in a quarter.
The Midwest came in with the highest average index score at 66.
Scores in the South varied widely but the region came in at a close
second with an average score of 65.7. Industries with the greatest
decline in financing accessibility included automotive,
manufacturing, and utilities. Industries with the greatest increase
in financing accessibility included education, legal services, and
wholesale.
After surveying 25 small business lenders, Lendio found that
lenders' market perceptions are relatively split. Lenders with a
less positive perception of the market cite poor macroeconomic
conditions and high interest rates.
"Many lenders are tightening their credit boxes, including
banks. We're in less than ideal macroeconomic conditions and
there's a higher cost of capital right now," said Minyang Jiang, Chief Strategy / Revenue Officer
at Credibly.
Conversely, lenders with a more positive view of the market cite
an expanding market with a growing number of alternative lenders,
technology improvements, and diverse financing options.
While the majority of small and medium businesses (SMBs) state
their access to capital meets or exceeds market averages, some
small business owners' perceptions skew much more negatively than
lenders.
In a separate report, Lendio found that despite growing options,
U.S. SMBs are still underserved. 65% of SMBs stated that loan terms
and amounts funded did not meet or fell below their expectations.
SMBs also feel detached from current loan options with 67% of small
businesses having no preference for a specific lender type and 50%
not knowing what financing solutions their banks offer.
"The current system wasn't built for the small business owner,
so there is a huge market need just waiting to be tapped," said
Brock Blake, CEO of Lendio. "The
solution isn't to pit banks against alternative lenders or make a
full shift to banking-as-a-service. Every one of these providers
has a contribution to make to an ecosystem that fully supports
small business owners whether it's through the bank they currently
deposit with or the vendor that sells them supplies."
Read the full report here.
About Lendio
Lendio is transforming small business
lending by connecting small businesses, lenders, and small business
service providers through a single integrated technology platform.
Lendio provides purpose-built software that automates small
business loan decisioning and underwriting for both banks and
digital lenders, uses AI to match small businesses to the financing
offers that best meet their needs, and embeds a full small business
loan marketplace directly within small business service providers'
platforms – all of which work together to get small businesses
access to the capital they need to be successful.
Contact:
Christina Sanders
4356663267
380864@email4pr.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/lending-index-finds-lenders-split-on-small-business-access-to-capital-but-optimistic-about-market-improvement-302206611.html
SOURCE Lendio