Wednesday, February 15, 2012

Study: Small banks better for small-biz loans

Small-business owners looking for loans might have better luck at small banks, according to a new report from MultiFunding, a Pennsylvania firm that helps companies find the right lender.

The average branch of a large national bank manages $4.6 million in small-business loans, compared to $6.8 million for regional bank branches and $9.1 million for state banks, the study found.

Large national banks use about 4 percent of their domestic deposits for small business loans, while regional banks use 11 percent and state lenders use more than 14 percent.

Small banks are "simply more equipped to handle small-business loans," MultiFunding said.

But because large national banks own more than half of the country's 93,000 bank branches, many small-business owners are starting in the wrong place, which could ultimately have an effect on the number of jobs they're able to create, the firm said.

"We hope that small-business owners across America won't be tempted by the 'big brand' when exploring their loan options," MultiFunding said. "The stakes are too high, for them and for all of us."

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