Access to financing remains a problem for nearly a third of Connecticut businesses, according to a recent poll.
About 27 percent of the 319 executives recently polled by the Connecticut Business & Industry Association said credit availability is a problem for their company.
That’s an improvement over the third quarter, when 31 percent reported financing remained tight.
Peter Gioia, an economist with the CBIA, said a lack of credit makes it more challenging for employers to keep or hire new workers, build their inventory, or even make it through slow business periods.
“Credit continues to be a major challenge for businesses,” Gioia said.
Gioia also noted that while not all companies are being shut out of the credit markets, some are not getting the full loan amounts they want or need, which is also a problem.
The Hartford Business Journal reported in December total lending by Connecticut’s 55 federally insured banks fell by nearly $1 billion over the past year, and the state’s largest, regional lenders are mostly responsible for the significant drop in loans.
The $1.7 billion drop in lending by the state’s larger banks was offset by an increase in loans made by Connecticut’s community banks, which boosted lending by over $800 million over the past year.
But the CBIA/TD Bank survey’s findings aren’t all bad.
The good news is that business executives expect credit conditions to improve in 2010.
The Future Expectations Index, which measures credit expectations three to six months from now, stands at 16.4 — up from 11.8 last quarter.
A reading over 50 indicates improvement in credit conditions, while readings below 50 indicate deterioration.
At the same time, the overall CBIA/TD Bank Credit Availability Index (TDBCAI) also rose to a level of 12.4 in the fourth-quarter survey, up from the third-quarter record-low of 11.8.
The TDBCAI, which indicates the health of Connecticut’s credit markets, measures two components: current conditions and expectations in the marketplace three to six months out.
Nearly half (46 percent) of the respondents report that the current credit conditions are poor or fair, in contrast to 4 percent who find them good or excellent.
Gioia said that businesses having a difficult time finding access to credit should look for alternative avenues.
For example, he said that companies can use Small Business Administration or Connecticut Development Authority loans to supplement credit from a local lender.
Bank Branch At Hartford High
Franklin Trust Federal Credit Union has opened a branch inside Hartford Public High School, an office that will be staffed by student interns and regular company employees.
The branch will be open Tuesdays and Thursdays from 1 to 4 p.m. exclusively for the school’s students, staff and employees.
Franklin Trust also has branches inside Bulkeley High School and adjacent to High School Inc. the insurance and finance academy.
“As at all of our offices, we are pleased to assist in the financial education of young men and women,” said Kiernan J. Dubay, the credit union’s president and chief executive officer.
Franklin Trust is the nation’s fourth oldest federal credit and was originally named in 1934 as the “Public School Teachers of the City of Hartford Federal Credit Union.”
Its name evolved over the years to better reflect an expanding membership base at the credit union.
International Appeal
Aetna has named Sandip Patel to the new position of head of its international business.
In this role, Patel is charged with developing growth strategies to further expand the company’s international business, which includes Aetna Global Benefits segment that provides expatriate and health administration services worldwide.
Patel, 43, joins Aetna from IBM Global Business Services, where he served as managing partner and general manager for the India/South Asia region.g
Greg Bordonaro is a Hartford Business Journal staff writer.
