Half of small businesses that want credit are being denied it, according to a new survey.
 
The Federal Reserve Bank of New York surveyed 426 small businesses in June and July for the report, which defined a small firm as privately owned, with 500 or fewer employees, and less than $25 million in revenue. Seventy percent of those surveyed had fewer than five employees on the payroll.
 
Of the businesses who received credit, 75 percent said they were getting only "some" of the credit they requested.
 
"Until now, we've only heard anecdotally about difficulties for regional small businesses in obtaining credit without any numbers to confirm this," Kausar Hamdani, senior vice president and community affairs officer at the Federal Reserve Bank of New York, said in a statement.
 
During the first half of 2010, nearly six out of 10 (59 percent) of the businesses surveyed applied for credit, showing demand is there. But more than two-thirds also had a drop in sales/revenue, with 49 percent saying these figures were down "significantly."
 
"As a bank that wants to make small business loans, we can't find the borrowers," Bernard Clineburg, chief executive of the $2 billion, 13-year-old Cardinal Bank, in Fairfax, Virgina, told MarketWatch.  "Qualified borrowers are hard to find."  

Other survey findings: Loyalty had little effect on loan outcomes – companies that borrowed in 2008, and so had an existing bank relationship, were rejected at the same rate in 2010 as other companies surveyed.

Who tended to get approved for credit? Companies that were at least five years old, showed growing revenues – or had enough cash on reserve that they didn't need financing in 2008.

After repeated urging from President Barack Obama, Congress in September passed a bill designed to make credit for small businesses easier to come by.

The aid package includes a $30 billion lending fund to be distributed by the Treasury Department to qualified small banks that promise to extend new loans to small business. (To read about what loan officers want to see to approve an application, click here.)

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