New FICO Survey Indicates Increase to Small Business Lending

Share Article

The Fair Isaac Corporation (FICO), in conjunction with the Professional Risk Managers’ International Association (PRMIA), has released the latest survey results of bank risk professionals. The survey shows optimism among bankers that small business lending will increase in the coming 6 months. The survey also points to a decrease in loan delinquency rates, but concern over increased student loan delinquency. The Lending Circle, a division of Sunovis Financial, assists borrowers and small businesses with their lending needs and keeps tabs on bank actions.

The Lending Circle, a Division of Sunovis Financial

The survey indicates optimism for increased small business lending over the next 6 months, with over 60% of respondents seeing an increase in credit requests from small businesses.

The Professional Risk Managers’ International Association (PRMIA) has released its quarterly survey of bank risk professionals for the 3rd quarter of 2012. This survey is conducted with the sponsorship of The Fair Isaac Corporation (FICO), and measures the expectations of bank risk professionals for the coming 6 months.

The survey indicates optimism for increased small business lending over the next 6 months, with over 60% of respondents seeing an increase in credit requests from small businesses. The majority anticipate an increase in both the approval rates and amount of credit being extended to small businesses in the U.S. Furthermore, over half of the respondents feel that the supply of credit for small businesses will meet the demand.

The bankers surveyed anticipate for the second consecutive quarter that delinquency rates for consumer loans will decrease or remain flat. This includes credit cards, car loans, residential mortgages, home equity lines of credit, and small business loans. The one consumer credit area where bank risk professionals still anticipate delinquency rates to increase is student loans. This is the fourth quarter where student loan delinquencies were anticipated to increase.

"The concerns about student loans align with research we recently conducted that found, among all Americans with student loan debt, the size of that debt increased by 54 percent between 2005 and 2012," said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. "During a time when consumers have been deleveraging, this is startling. It’s hard to see how this trend is sustainable. I suspect rules changes will be needed for the repayment of student loans to help former students get on with their lives without becoming prisoners of their debt."

Further optimism was shown in the expectations of consumer credit supply to be able to satisfy demand. This is the second straight quarter in which consumer credit supply is expected to meet or exceed demand. The percent of respondents expecting consumer credit supply to meet demand is as follows:

  •     Car loans: 76%
  •     Credit cards: 72%
  •     Mortgage refinancing: 59%
  •     Student loans: 58%
  •     Small business loans: 53%

Both new mortgage financing and home equity line of credit expectations were split nearly evenly among the respondents.

About The Lending Circle
The Lending Circle, a division of Sunovis Financial, assists borrowers and small businesses with their lending and capital needs. Sunovis specializes in SBA loans, while The Lending Circle covers all types of loan needs, from conventional to alternative lending, micro, refinancing, factoring, and more.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Kathy Heshelow
Visit website