Lending Index Shows Mixed Sentiment on Access to Small Business Finance, As Lenders Grow on Good Posting Rate Cuts

November 4, 2024, Lehi, UT – Lendio’s Q3 2024 SMB Lending Index highlights an optimistic lending market, showing modest increases in small business access to finance. Despite easing credit conditions, sentiment remains mixed, with lenders expressing optimism for future growth, while small business owners report continued concerns about access to finance.

The SMB Lending Index score increased from 62 in Q1 2024 to 64 in Q3 2024, reflecting the gradual relaxation of loan eligibility requirements due to the Federal Reserve’s interest rate cuts. Based on the financial profiles of more than 14,000 businesses that sought financing on the Lendio platform per quarter, the index serves as a benchmark for national SMB lending trends.

Regionally, the South led with 68 points, up two points from Q1, followed by the Midwest with an unchanged 66 points. Access to finance has improved in industries such as agriculture, utilities and transport, while legal services, eCommerce and entertainment are seeing growth. to tighten conditions.

Survey results from 25 lenders reveal excitement about growth following the Fed’s rate cuts.

Although many small and medium-sized businesses report that their access to finance meets or exceeds the market average, a gap remains between the expectations of lenders and the perceptions of small business owners. 23% of small business owners rated access to financing as “very poor,” a category that does not select lenders. Similarly, only 27 percent of SMBs feel that their access to finance exceeds the market average, compared to 41% of lenders who have a positive view.

“Lending is still challenging for small business owners, but we are seeing a greater desire to borrow money and invest in growth plans as prices drop and inflation slows,” said Brock Blake, CEO of Lendio. “Our lenders are reporting an increase in qualified borrowers seeking larger amounts, which points to a more optimistic outlook for seasoned business owners.”

Read the full SMB Lending Index report.

About Lendio

Lendio is revolutionizing small business lending by connecting small businesses, lenders, and small business service providers through one integrated technology platform. Lendio provides purpose-built software that automates small business loan decisions and underwriting for both banks and digital lenders, uses AI to match small businesses with financing offerings that best meet their needs, and embeds the full small business loan marketplace directly within the small business service. supplier platforms – all working together to enable small businesses to access the capital they need to thrive.

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