In the aggregate, Fairfield County”™s community banks had 180 fewer small business loans outstanding as of the second quarter, according to new Federal Deposit Insurance Corp. data.
As tracked by dollars, overall lending was down by a negligible $6 million, or 0.6 percent of a small business lending market approaching $1 billion among community banks.
The new FDIC data arrived even as the Federal Reserve Bank of New York published a new survey suggesting banks throughout the region are turning down loan applications from sizable percentages of small business owners, or otherwise discouraging them. Banks have maintained lower lending totals are more a function of decreased demand in a down economy. In a National Federation of Independent Business index published last week, confidence dropped a third straight month on small business expectations of lower sales and earnings.
Ridgefield-based Fairfield County Bank reported pumping an additional $30 million into the small business market over the course of the quarter, maintaining its status as the largest small business lender among local community banks.
After leading Fairfield County lenders for increased small business lending for the past few years, Bank of New Canaan had less money on the street in the second quarter, though its sister Bank of Fairfield maintained small business lending levels. Both banks are subsidiaries of BNC Financial Group Inc., which rolls results from its newest subsidiary Stamford First Bank into those of Bank of New Canaan.
Stamford-based Patriot National Bank continues slashing its loan portfolio, reporting $45 million in small business loans (including those generated at a few branches in New York) to FDIC, versus $61 million in the first quarter of 2012.
People”™s United Financial Inc., the dominant local bank holding 18 percent of all Fairfield County deposits, saw small business loans drop $75 million in the second quarter to below $1.9 billion across its Northeast territories, a 4 percent decline from the first quarter. Banks do not break out small business lending by state or county to the FDIC.
In a separate Federal Reserve Bank of New York report, more than half of small businesses surveyed said cutting costs remains their most important strategic consideration, slightly ahead of attentiveness to clients.
Products and services were a distant third, with 37 percent of businesses citing that as their most critical area of focus, followed by productivity at 28 percent and reducing debt at 24 percent.
Access to capital was the biggest barrier to growth for 36 percent of small businesses surveyed by the Fed, followed by talent at 17 percent and governmental regulations at 14 percent.
More than 40 percent of business owners said banks are “not lending to their type of business,” in the words of the Fed survey, with 28 percent blaming troubles securing credit to insufficient collateral, 25 percent to a low credit score and 23 percent to weak sales during the past few years.
For those discouraged from seeking loans, most were making ends meet either through earnings or by tapping their personal assets.
The poll reflects responses in April and May from nearly 550 small businesses, half of them in New York City, but also including about 15 in Fairfield County, which is the lone New England territory not under the jurisdiction of the Federal Reserve Bank of Boston.
Businesses most typically have 10 or fewer employees and nearly half had revenue under $250,000 last year.
”“ Staff writer Patrick Gallagher contributed to this report.
