NEW YORK (MNI) – The following is a survey summary released by the
New York Federal Reserve Bank Monday:

New York Fed’s New Small Business Poll Shows Evidence of Credit
Demand; Cash Flows for Small Businesses Key to Credit Approval

New Fed study also reveals unmet credit needs remain an important
issue for small businesses

The Federal Reserve Bank of New York today released Access to
Credit: Poll Evidence from Small Businesses-results from a poll of small
businesses in the region, as a part of the Bank’s Community Affairs
Facts & Trends series. The results showed that during the first half of
2010:

* 59% of poll respondents applied for credit, demonstrating
existing demand;

* Over two-thirds of poll respondents experienced sales/revenue
declines, implying a broad weakening of small business finances; and

* Only half of small business applicants received credit, and 75%
reported receiving only ‘some’ or ‘none’ of the credit they wanted.

Small businesses typically create more jobs than larger firms do at
the start of economic recoveries. However, recent contractions in
borrowing have limited the ability of small businesses to play this
critical role. This small business report evaluates three potential
causes of the recent decline in small business lending: weak demand,
weakened applicant quality, and restricted credit availability. It finds
evidence of existing demand, weakened business finances, and credit
gaps. The report presents new data from 426 regional small businesses
(NY, NJ, CT and PA) on their financial well-being, credit needs and
recent borrowing experiences.

“Until now, we’ve only heard anecdotally about difficulties for
regional small businesses in obtaining credit without any numbers to
confirm this,” said Kausar Hamdani, senior vice president and Community
Affairs officer at the Federal Reserve Bank of New York. “A main purpose
of this poll was to hear directly from small businesses about their
recent credit experiences and to analyze them systematically in order to
learn more about where the largest obstacles exist.”

Developed by the New York Fed’s Community Affairs department, the
Facts & Trends series provides analytical summaries intended to present
key facts on topical issues to assist governments, community advocates
and others to better understand, monitor and address specific economic
concerns within the Federal Reserve’s Second District. The data for this
poll were collected online with the help of local public and nonprofit
partnerships.

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