Small Business Lending Jumps in April: What It Means for You

Highlights:

• Small business lending saw its biggest jump since 2020 in April, but experts advise caution due to the unpredictable economy.
• Consumer confidence and business sentiment are improving, but future confidence among business owners remains low.
• Banks are maintaining tight lending standards despite the increase in lending, and economic uncertainty suggests a continued "wait-and-see" period.

The June Main Street Lending Report shares the latest small business lending data and trends in this fast-moving economy. The most important item of note is the continuance of a wait-and-see period. Changes are taking place rapidly, so stay informed.  

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Small Business Lending Shows Big Jump

In April, small business lending saw its biggest jump since 2020. That’s good news — but before you celebrate too much, let’s look a little closer.

While the numbers are up, experts are warning not to read too much into it. Today’s economy is still hard to predict, and we need more time to see if this trend will last.

What’s Going on?

Right now, many small businesses are using inventory they already have. That means they’re not raising prices just yet. But if costs go up or supplies run low, that could change fast.

At the same time, consumer confidence is rising, which is a positive sign because it shows people are feeling better about spending money. In addition, there’s been a small increase in how businesses feel about the present. Employment expectations are also improving for the first time in 2025.

Still, when it comes to the future, business owners aren’t too sure. Their hopes are slowly coming back, but confidence is still low overall.

Tight Lending Standards

Even though lending is up, banks are still being careful. In fact, in the first quarter of this year, many banks made it harder to get a loan by tightening standards. While it’s too early to say what this means long-term, many expect strict loan rules to continue.

The Bigger Picture

Jobs are looking strong and the economy is mostly holding together. Think of it like the eye of the storm: It’s calm for now, but things could shift fast.

One concern is that CEO confidence in larger companies is still low. This factor matters because when big businesses start cutting back, the sentiment often trickles down to small businesses, too.

So, What Does This All Mean?

In short, the June Main Street Lending Report is a mostly positive report, but we’re not out of the woods yet. There’s still a lot of uncertainty. The numbers are moving in the right direction, but they’re also bouncing around quite a bit. It may take time to see the full picture.

Stay cautious. Stay informed. And, as always, keep an eye on what’s ahead.

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