Small Business Borrowing on the Rise at the End of 2013

by Crestmark 28. January 2014 08:25

The borrowing for U.S. small businesses increased near the end of 2013, which has analysts optimistic about the economic outlook for 2014.

This increase, reported by the Thomson Reuters/PayNet Small Business Lending Index, measures the volume of finance lent to small companies. At 120.4 in October and 111.4 in November, this level is the highest since August 2007—right before the financial crisis set in. Additionally, November, which only had 20 working days, saw the highest per-day borrowing rate out of the entire year.

This kind of increase points to an optimistic U.S. economy. Normally, a high level of small business borrowing is correlated with overall economic growth because small companies produce more goods and increase assets, ultimately resulting in more money infused into the economy as well as the creation of more jobs.

"It's another sign of continued expansion," PayNet founder Bill Phelan said, according to Reuters. Small businesses "are seeing more demand for goods and services, and that's all good for GDP."

Fewer Delinquencies

With lighter financial burdens, small businesses have been able to not only borrow more, but also pay back those loans in a timely manner.

The percent of small business loans unpaid at 31 days past due and 180 days past due was down to 1.43 percent, which according to Reuters, is a new record low. For a little perspective, the number of delinquent loans reached a high of 4.73 percent in August 2009 and has steadily declined since then.

Looking to the New Year

Because PayNet's lending index has typically correlated in the past to more overall economic growth for the next one to two quarters, analysts believe the US economy should continue to improve in 2014. Some factors in improving the outlook will be actual financial infusion—such as more business production—but the attitude of the American consumer will also play a key role. 

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Small business loans

Staffing for the Online Era

by Crestmark 23. January 2014 06:55

Staffing a business used to be a fairly straight forward process: a manager would receive a résumé, conduct an interview, and decide whether or not the candidate fit with the company. But as technology has advanced, the internet has begun to play a larger and larger role. 

From places like Elance to SITE, online staffing sites have hundreds of thousands of job postings with hundreds of millions in revenue, covering all industries, skillsets, and experience levels. So, what does this mean for the industry as a whole?  

It means that things are changing for the better, and there are benefits for both job seekers and employers.

Benefits for Job Seekers:

Job seekers can find a multitude of opportunities: from a project that may involve one or two assignments for supplemental income, to ongoing and long-term contract opportunities. And with the ability to search based on keywords related to their qualifications, job seekers can drastically cut down the time it takes to find relevant positions to apply to.

This changes the game dramatically. Rather than relying on a recruiter, job seekers have the power to take their search into their own hands.

Benefits for Employers:

For the employer, utilizing online tools allows them to automate many of the processes that previously needed to be completed manually. In other words, employers can use new tools to save money .

While taking the industry online doesn’t eliminate the need for recruiters, it does reduce both the effort needed to recruit and the money spent on recruiting. According to Forbes, recent data found that businesses around the world spend more than 3,300 per hire on recruiting alone, which is actually up six percent from previous years. This equates to the U.S. spending 72 billion on recruiting services per year, with the international numbers nearly three times that.

As the staffing industry continues to shift online, the need for companies to invest in technology will continue to rise. That’s where Crestmark can help. If you have a staffing company and are in need of capital to grow your business, give us a call today!   

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Industry Financing


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