Over the past couple of weeks, there has been evidence of a continuation of the sometimes tentative recovery in the small business market.
- The Federal Reserve’s Senior Loan Officer Opinion Survey of Bank Lending Practices found a continued easing of lending standards for small firms, as well as a growth in demand for such loans (however, this growth in demand trails that for large and middle market firms).
- A Greenwich survey of small businesses found evidence of significant growth in demand for small business loans (up to now, banks have been claiming that they are willing to lend, but that small business demand has been weak)
- According to the latest ADP Small Business Report, private small business employment rose by 84,000 in April 2011. Small business employment fell every month from April 2008 to February 2010, with a total decline during this period of 2.7 million. Since February 2010, private small business employment has grown every month, with a total increase of 788,000.
- Some surveys (such as the latest Capital One Small Business Barometer survey) show an improvement in small business optimism. However, it should be acknowledged that this can be tentative, and other surveys (such as the Wells Fargo/Gallup Small Business Index survey and the NFIB’s Index of Small Business Optimism) registered recent declines.
Banks are now starting to introduce initiatives in anticipation on a sustained small business recovery. At the end of April, Chase committed to lending $12 billion in small businesses in 2011. And some leading banks have introduced small business initiatives around the upcoming National Small Business Week:
- Citibank launched a nationwide small business campaign, starting with a national outreach day. The bank expects to reach 50,000 small businesses through a range of activities
- TD Bank has launched its first small business outreach campaign, with a goal of reaching 25,000 companies during May
- Wells Fargo launched its annual Small Business Appreciation Celebration and introduced the online Business Insight Resource Center
Other national and regional banks, as well as community banks, will be looking at these small business campaigns with interest, and will be trying to determine if they constitute a one-off to coincide with National Small Business Week, or the tipping point for an industry-wide re-commitment to this segment. If it is the latter, these other banks will need to quickly develop and introduce small business marketing and sales support programs, so that they are not left behind, as small business recovery takes hold.