It appears as if banks are loosening their grip on those small business loans, at last. At one point, just getting a mortgage loan was nearly impossible, but now it is getting easier, leading to the hope that the economy might just be ‘on the mend’.

It happened to Laura Benson, a small business owner, who unexpectedly got an increase in her business credit line via email from her bank.

“They just gave me the $7,000, without my asking,” Benson says. “Omigosh, just when I needed it.”

Another increase came from Wells Fargo, which was a pleasant surprise to Jeanne Beatrice, who was previously rejected for an increase request she made due to a slow sales period for her online basket business. At the time, the bank said the St. Paul, MN company didn’t have enough of a payment history on her loan. Six months later the good news came.

It appears the grip of fear is clearing, and bankers are lending again and small businesses are finding it much easier to get their loans and credit line increases. Banks are even courting company owners and giving them easier terms. Still, it isn’t up to the pre-recession years, especially when a business is young or considered risky. But post-recession lending is up, a hopeful sign for the economy because small businesses that borrow may be willing to expand and hire.

The evidence is piling up, as banks had huge numbers, $287 billion, in outstanding loans to small businesses in Dec, according to the Federal Deposit Insurance Corp. Then in January, the money loaned to small businesses by banks, independent commercial finance companies and corporations, increased by four percent from last year, Thompson Reuters and PayNet indicated.

And, to add more evidence, Andrew Slattery, who owns 26 Valvoline Instant Oil Change franchises in both Carolinas did get loans for initial location purchases, but he also had to go through about 20 rejections. Banks are now making him offers of increases and he is finding it easier, and the requirements have eased up a bit.

“The turnaround time is faster. It used to take seven or eight months, where now it’s two or three months,” says Slattery, who just closed on a $10 million loan to refinance some of his locations.

Lisa Stevens, head of Wells Fargo small business banking in San Francisco, says that companies sales and cash flow are improving, and so are balance sheets, making it easier to offer them credit line increases when the business owner is in a better position to handle the debt.

In all, it is easier for established businesses to get loans and increases, however, for new businesses – you’ll still need to show that the debt isn’t going to put you into the red, and that your business has a promising financial future.

Image via Wikimedia Commons