MADISON, Wis. (6/4/14)--Optimism is in the air for small businesses with indications that they are willing to lend and adding to their payrolls.
In a Sageworks survey of nearly 420 credit union and banking professionals, 67% responded that their institution would be either making "more" or "significantly more" loans to businesses this year compared with 2013.
About 20% said their loan volume would remain stable, and only 3% told the financial information company that they would be making fewer loans.
Privately held companies are growing stronger--a rate of 8%, according to Sageworks--which signals they are healthy enough to take on debt.
"There's a possibility that banks and credit unions may be recognizing this slow but steady improvement on the income statements and balances sheets of privately held companies that are applying for loans," said Sageworks' Tim McPeak.
Small businesses added 35,000 jobs in May, according to Intuit Inc.'s monthly small business employment and revenue indices. The increase is the largest in more than a year--and triple the average of 12,000 new jobs per month since April 2010.
The employment index is based on April 24-May 23 data from Intuit and QuickBooks online payrolls of about 231,000 small business employers.
"This month's employment increase is the largest we've seen in more than a year. In addition to the impressive increase of jobs this month, the hiring rate is also at the highest level we've seen since early 2009," said economist Susan Woodward.
However, Newtek Business Services Inc. released the May results of its SB Authority Market Sentiment Survey, which offered a different take. Of the more than 1,500 respondents, only 30% of business owners plan on hiring in the next three to six months.
"Our May survey depicts a lack of intention in our small business clientele to hire over the next two quarters and that the trend of a jobless economic recovery may continue," said Barry Sloane, Newtek chairman/president/CEO.