Small-business owners have new reason for optimism, as a major U.S. bank announced a major expansion of its small business lending plans.
JPMorgan Chase & Co. said Tuesday it will lend $12 billion to U.S. small businesses in 2011, a 20 percent increase over the bank’s 2010 commitment.
Alfred J. Titone, New Jersey district director for the federal Small Business Administration, said the Chase announcement echoes other data and evidence he’s seen indicating an upswing in loan activity. A report last week out of Titone’s office showed approvals in New Jersey were up 13 percent during the first half of the federal fiscal year 2011 (which began Oct. 1); the dollar amount lent increased by 48 percent.
Titone said there are multiple reasons for the increase in lending, including incentives from the federal stimulus that “helped prime the pump, and I think folks that have been waiting have decided I think it’s time to take the plunge.”
Chase said it has increased small-business lending by 64 percent during the first quarter of 2011, making nearly 100,000 loans to businesses with annual sales of less than $20 million.
“It’s critical that we support small businesses as they continue to fuel the economic recovery across the country,” said Michael Cleary, CEO of business banking at retail financial services at Chase, in a company press release.
In New Jersey, Chase said it increased its lending to small businesses by 34 percent in 2010, making nearly 11,000 loans totaling $314 million. Spokesman Michael Fusco said in 2010, the bank created a second-look loan program, which resulted in $283 million worth of loans being granted after initially being passed over. He said the bank has also hired more than 500 business bankers, charged with increasing the bank’s reach and developing new ways to assist businesses.
Titone said the economy is still in recovery mode, but he said lending is better than it had been during the recession.
“Don’t get me wrong — there are still businesses out there that can’t get the capital that they want,” he said. “But that’s always the case. It’s probably still a little tighter out there than it could be, but we’re definitely seeing banks loosening up.”
Titone said he’s optimistic about the economy, and he is seeing increasing evidence to back up that optimism.
“It’s great news for New Jersey that we’re seeing this increase,” he said. “There’s still a lot of work ahead, but we’re definitely on the right track.”
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