A survey of senior loan officers by the central bank reveals that the domestic banks in the US are now making changes in their policies so that it will become easier for businesses to procure funding. The survey also indicates that the competition among banks for business loans has been increasing lately. This bodes well for businesses of all sizes who were finding it hard to get financing for their business plans during the past few years due to the economic downturn.
The drivers to the turnaround story
The asset purchase program by the central bank which is intended to stimulate growth coupled with the historically low interest rates are being cited as the main drivers for this turnaround. The businesses’ pent up demand from the last few years, when banks were reluctant to lend money, is also suspected of acting as a catalyst.
Easing funding acting as a catalyst for growth
Many businesses, now, see an opportunity to avail funding at a low cost that is very hard to resist. Once the funds are utilized for new projects, the demand for man power is the natural next step. This, in turn, results in job growth and this is exactly what was intended by the central bank. The results are showing up, though gradually. The expectation is that the moderate growth that is being witnessed now will pick up pace in the months ahead as long as the current policies of the central bank remain largely untouched.