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Industry News

Increase in business loans has bankers optimistic

More businesses are applying for and receiving loans.

More businesses are applying for and receiving loans.

As the United States continues to slough off the effects of recession, one metric stands out as particularly encouraging: business loans have soared to record rates, a trend with portends well for the economy as a whole. 

Bank executives have expressed positive expectations for the country's financial future. From their interactions, business customers have shown a level of hope that wasn't present during the worst of the economic doldrums. 

"I am hearing more when I talk with customers about their interest in building something, adding something, investing in something," Wells Fargo & Co CEO John Stumpf said on a conference call with investors last week. "There is more activity going on."

This most recent information is also encouraging news for potential entrepreneurs looking into forming a limited liability corporation. Not only do increased lending rates signify that it will be easier to find funding for ventures, the improved economy also portends well for the success of those new businesses. The old adage that "a rising tide" lifts all ships is especially true when it comes to the economy: the more people have stable financial footing, the more patrons a fledgling company can expect to be available. 

The psychological effect shouldn't be entirely downplayed, either. With these other, more concrete signs of recovery come a population more willing to loosen the purse strings and spend on things. That, in turn, helps to boost the economy, which feeds directly back into their sense of optimism. In this way, it becomes cyclical and self-strengthening, a process a new business owner could do very well to be a part of.