NEW YORK (AP) — Small businesses in the Northeast are getting more loans, though many still feel that their growth is hindered by a lack of access to cash, according to a survey released Monday.
The survey of 800 companies by the Federal Reserve Bank of New York shows that 63 percent of those that applied for loans in the past year received at least some money. That's the same success rate shown in a 2012 survey. But 44 percent say they got the full sum that they applied for, up sharply from just 8 percent a year earlier. Most of the increase was due to more lines of credit being approved.
And the number of firms that just stopped applying for loans because they were too discouraged about getting cash fell to 18 percent from 29 percent a year ago.
The New York Fed surveyed companies in New York, New Jersey and Connecticut. The latest survey shows there has been some slight movement in the stalled environment for small business lending. However, 49 percent of those surveyed said their growth is still challenged by access to capital. Two-thirds of those were companies operating in the red, but even one-third of profitable businesses said they too had a hard time getting the credit they needed to expand.
Other surveys too have shown that many businesses find loans hard to get, but also that many owners aren't even applying for loans because of concerns about their companies' finances or the economy.
In the latest Fed survey, more than half of the businesses hadn't applied for loans in the past year, with 37 percent saying they have enough credit or don't want to take on more debt.
Of those who did apply but were rejected, nearly half were told that they didn't have enough collateral. Thirty-seven percent were told by banks that they hadn't been in business long enough to qualify for a loan. A low credit score or weak cash flow was cited in about a quarter of loan denials.
The Fed's survey also asked owners how they were affected by Superstorm Sandy, which swept through the region last fall.
Nearly half of owners had losses linked to the storm, especially businesses in the transportation, warehousing and manufacturing industries. A majority of owners booked losses of less than $25,000 but 13 percent said the storm has cost them over $100,000.
Over 70 percent of companies surveyed carried some kind of insurance, but only 8 percent had flood insurance. Of those who filed claims, one-third was not covered for damage. Fourteen percent say they applied for disaster relief in the wake of the storm.