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Small-Business Lending: Getting Better, Still Not Great Small-business lending has been showing signs of life, albeit not the activity seen before the recession.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

The lending market for small businesses has shown signs of improvement compared to the nadir of the recession when small-business owners and entrepreneurs were virtually cut off from sources of capital. However, the capital markets for small businesses are by no means healthy and recovered.

One new barometer of small-business credit shows lending to franchisees has been improving over the past year but still remains well below where it was before the recession. The International Franchise Association and BoeFly, an online marketplace connecting small businesses with lenders, created the Franchise Lending Index, a monthly read on the ability of franchise owners to gain access to capital. The index shows franchise lending rose nearly 11 percent between February 2011 and February 2012.

Franchise owners are increasingly taking advantage of low interest rates to refinance their debt, not so much to start new franchises, says Mike Rozman, co-president of BoeFly. Despite the improvement in the past year, the franchise industry is still hamstrung in its ability to access capital, which is effectively limiting growth and job creation, according to IFA President and CEO Steve Caldeira.

Related: Looking for a Loan? Don't Wait for a Big Bank

That's the story across the small-business lending markets -- not just the franchise industry. Small-business lending, though improved, is far from its pre-recession levels.

In an effort to keep attention focused on small-business credit markets, policymakers, lenders and business leaders met today at the second annual Small Business Lending Summit in Washington, D.C. The day-long conference was hosted by the IFA, the Consumer Bankers Association, the Financial Services Roundtable, and the National Association of Government Guaranteed Lenders. Attendees included Karen G. Mills, head of the U.S. Small Business Administration; Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corporation; Jon Luther, chairman of the Dunkin' Brands & Arby's Restaurant Group; and Tel Broome, chief commercial credit officer of BB&T.

Related: The JOBS Act: What You Need To Know

The conference hosts sent a statement to Congress and the Obama Administration, urging policymakers to meet with constituents both in Washington, D.C., and in the districts that they represent on a regular basis through the election year to discuss the issues that small-business owners and lenders are dealing with. recently spoke with SBA Administrator Karen Mills about the climate for small-business lending.

Talk to us: What's been your experience in trying secure capital lately? Have you been successful? What challenges have you faced? Leave us a comment below and let us know.

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

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