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With interest rates rising in earnest, should small-business owners brace themselves for a cold shoulder from lenders? Not necessarily. It seems
that the pinstriped set is evenly divided on the outlook for small-biz lending, according to Phoenix Management Services' quarterly survey.
Philadelphia-based Phoenix, which advises troubled companies, surveyed 86 lenders at commercial banks, finance companies, or factoring
companies.
The survey found that 41% expect to lend to more small businesses in the next six months, up from 30% last quarter. Sounds super-bullish for
small biz, right? Too bad the share of naysayers is up sharply, too. Nearly 40% expect to lend to fewer small businesses, vs. 33% last quarter.
One thing is for sure -- the percentage of fence-straddlers has dropped drastically. Only 20% foresee stasis for their small-biz lending, down
from 37% in the fourth quarter of 1999.
What's behind the divided views? The survey doesn't say, but it sure sounds like bankers are having as much trouble as everyone else calling a
peak in this economy. The lenders are almost unanimous in their expectations of higher rates. Yet they're not rushing to tighten lending
conditions -- such as collateral requirements or guarantees -- on the smallest loans, those under $1 million.
Just over 72% plan no changes, 24% intend to tighten, and 4% plan to loosen. That compares with fourth-quarter 1999, when 71% planned no change,
28% planned to tighten, and only 1% planned to loosen.
The moral of the story for loan seekers? Don't take no for an answer.
By
Julia Lichtblau
in New York
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