Finally, Access to Capital Improving for Small Businesses Several reports show that entrepreneurs are gaining ground when it comes to the funding they need to run and grow their business.

By Catherine Clifford

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The credit pipeline for small businesses has been frozen or clogged for years now. And while plenty of entrepreneurs still can't get financing, a growing number of indicators point to improvement in access to capital. Here are some signs worth watching.

-- The nation's largest banks saw more demand for capital and approved more loan applications in September than the month prior. According to a report this week on banks with more than $10 billion in assets, the overall volume of loan applications increased by 5.6 percent in September over August, reports Biz2Credit, an online credit marketplace in New York City that connects small and midsize businesses with lenders. At the same time, approval rates jumped 30 percent at big banks, climbing to 14.2 percent in September, up from 10.9 percent in August.

It's especially critical for small businesses to see big banks returning to the market because they are generally able to provide longer-term, lower-cost, working capital loans, says Rohit Arora, the Biz2Credit CEO and co-founder. Banks are lending more now that the economy is improving, he says.

"The economy has become stable and the housing prices have stopped dropping and business owners are feeling more confident, and that is leading to more activity," Arora says. Demand has been pent up for the type of lower-cost, longer-term working lines of credit typically available at bigger banks.

Related: Cred, Connections, Cash -- The Workings of a Business Accelerator

-- Banks have made record amounts of loans backed by the SBA in the past two years. If a small business isn't able to qualify for a traditional bank loan, one option is to see whether the bank will make the loan with the backing of the Small Business Administration. These SBA loans serve as crutches for the lending market: They provide a backstop for the bank, giving it the confidence to make the loan to the small business. In its 2012 fiscal year, which ended in September, the SBA backed $30.25 billion in 53,848 loans to small businesses.

The SBA has backed more loans than that only once, in 2011, when it backed $30.5 billion in 61,689 loans to small business. The record resulted from stimulus efforts which sweetened the condition of the loan guarantee for both the lender and the borrower, passed under the Small Business Jobs Act of 2010.

"Reaching such strong numbers is a clear sign that both the business and lending communities are regaining their confidence in the economic climate of the country," SBA Administrator Karen Mills said in a written statement.

Related: The Forgotten Issue? Romney, Obama Stay Mum on Capital

-- Angel investors have been sinking more money into startups. Angels invested $9.2 billion in 27,280 startups in the first two quarters of 2012, a 3.1 percent increase in dollars and a 3.7 percent increase in number of entrepreneurial ventures over the same time in 2011, according to a report this week from the Center for Venture Research at the University of New Hampshire.

This report illustrates the gradual recovery in the angel investment market since 2008, says Jeffrey Sohl, the director of the Center for Venture Research. But the angel investor market is still slightly gunshy of the youngest companies seeking their first round of seed capital compared to pre-recession levels, a key category of angel investing for job creation, he says.

--Venture-capital firms have raised more money this year than last. In a positive sign for entrepreneurs who depend on venture capital to launch and grow, so far in 2012, venture capital firms have raised $16.2 billion, representing a 31 percent increase from the $12.4 billion raised in the first nine months of 2011, according to a report from Thomson Reuters and the National Venture Capital Association released this week.

The $5 billion that venture-capital funds raised in the third quarter of 2012 represents a slight decline from the second quarter, when the industry raised $6 billion. Still, the $5 billion raised in the past three months is 130 percent more than the $2.17 billion raised in the same quarter last year.

Related: What Venture Capitalists Are Investing in Right Now

What has your experience been in getting access to the capital you need to launch and grow your business lately? Leave 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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