Pepperdine survey: Lenders see business borrowers’ credit quality decline, requiring more collateral

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This morning our friends at The Coleman Report shared some stats out of the Pepperdine Private Capital Market Project report. It’s a study of all major types of funding and contains survey data about what bankers have seen in lending trends.

<p”>Among other things, one stat stands out for me:

“Over the last 12 months, [lenders report] seeing decreased credit quality of borrowers applying for credit, with an increase in demand for business loans, leverage multiples and focus on collateral as a backup means of payment.”

This is a tough trend for businesses, especially small business owners. Increasingly, they’re forced to leverage their business or provide personal guarantee–all because their credit isn’t healthy enough.

Big take-a-way for me: Start being proactive about watching and managing your personal and business credit early, before you need to use it. Getting backed into a corner by bankers is no fun at all. 🙂

Delve deeper into the Pepperdine study here

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About the Author — Jared Proctor is Brand Director at Nav. He has over fifteen years of financial services experience and is passionate about small business issues. Jared is married to a small business owner and he's a father of twin toddlers, so discovering time hacks is a matter of survival.

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