The Washington Post recently pulled together a report on the health of small business in America. The headliner? The health of small business credit.
Expectations for 2013 were muted, as the steady recovery from the recession continued. What no one expected was a 4.5% increase in the average small business credit score for the year thus far, a highly encouraging number if I’ve ever seen one. The Post also points out that small business lending demand is growing, using numbers from a variety of sources, including out monthly Small Business Lending Index.
What’s behind this? The simplest explanation is also probably the most accurate explanation in this case, and I’d have to chalk this up to a recovering economy. When times are better, small business cash flow improves, they don’t have to take the same kind of risks to get capital and credit scores rise accordingly. There are other factors, but this is clearly a leading one.
If the economy continues to slowly improve, we may see further growth in credit scores. As a leading smaller business lender, we see businesses come in with a variety of credit scores. Our dynamic credit scoring system allows us to provide financing for those with less-than-pristine credit, but certainly on balance small businesses have a better chance of getting the lending they need with better scores. This is good news for businesses of all stripes.
Has your credit score increased in 2013?
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