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Fed Governor Aims to Settle Small Business Credit Dispute
Published on Apr 15, 2011
Read 'Fed Governor Aims to Settle Small Business Credit Dispute' at 'Time to Start Up,' the small business blog by BizFilings.
Progressing a number of recent comments and studies from public officials, Federal Reserve Governor Elizabeth Duke asserted that financing conditions for the U.S. small business sector are likely to continue to improve in coming months.
Duke referenced a number of recent surveys that seem to contradict each other, with some arguing that small businesses' biggest problem has been a lack of available credit while others blame weak sales for the problem.
The real issue, she asserted, is more complex than either, in that lending to the sector has been troubled, but perceptions of the credit market among small business owners has discouraged them from even applying.
"Many small business owners were so convinced that their requests would be denied that they did not even apply for credit," Duke said in a speech Thursday. "Despite this restricted credit availability, small business owners, by a large margin, still considered their most significant problem to be weak sales."
However, she added, conditions are expected to improve as banks and other private lenders become willing to embrace greater levels of risk. Additionally, consumer spending and overall confidence - both of which have shown recent improvements - will also help stimulate the sector.