"When weaker prospective borrowers reenter the market as economic conditions improve, it is possible, if not likely, that credit access for the overall population will deteriorate before it gets better," the report said.
Of those seeking loans, 41 percent of small-business employers got the loans they wanted last year, while 19 percent got “most,” 18 percent got “some,” and 16 percent were shut out of the credit market.
A small-business focused measure passed last fall includes a $30 billion loan fund that is expected to spur about $300 billion in lending by community banks to small businesses.
“Unfortunately, the economic atmosphere for small businesses did not improve much in 2010,” said Denny Dennis, NFIB Research Foundation senior fellow and report author. “Despite an active legislative session, new federal policies have fallen short; they have failed to address the underlying real estate and demand problems that have caused our markets to dive and now stagnate, and they have failed to quickly and effectively aid small businesses in their struggle to grow in the current unfavorable economic conditions. This recovery period will be unique, and we don’t expect credit levels to reach the levels they did a decade ago.”
Competition for small business’s banking, which had been rapidly increasing since 1980, also came to an abrupt halt in 2010, the report said.
"Although the real estate situation appears to have improved over the last year, ownership continues to be a major drag on small business’s capacity to borrow," the report said. Of small-business employers, 95 percent own real estate, while 68 percent have at least one mortgage, 17 percent have at least one second mortgage and 12 percent have at least one collateralized.