Here’s a bit more data that would seem to indicate that the availability of bank credit is not the devil it’s made out to be.

The Federal Reserve Bank of Atlanta’s Macro blog has conducted another survey of small businesses in its region and comes up with some fairly positive indications that firms in that region are gearing up at least for some modest expansion this year. They also turned up some interesting data on the impact of bank lending on those plans:

Interestingly, cost and availability of external financing were among the least frequently cited reasons for either increasing or not increasing capital spending (cited by 9 percent and 15 percent of respondents, respectively). This theme is consistent with the findings of our recent small business survey, as well as the trend in the National Federation of Independent Business (NFIB) survey of small businesses. According to the NFIB, “finance” was reported as the number one small business problem by only 4 percent of respondents in December 2009. The number one single factor was poor sales.

The NFIB report that was referenced had this to say about credit availability:

Regular borrowers (accessing capital markets at least once a quarter) continued to report difficulties in arranging credit at the highest frequency since 1983. A net 15 percent reported loans harder to get than in their last attempt, unchanged from November. Still that is not nearly as severe as the financial distress reported in the pre-1983 period. Twenty-four months of recession have sapped the financial strength of many small firms. Thirty-three (33) percent reported regular borrowing, fairly typical of post-1983 and unchanged from November. Eight percent of all owners reported that their borrowing needs were not satisfied, down two points from November. The remaining 92 percent of all owners either obtained the credit they wanted or were not interested in borrowing. Only 4 percent of the owners reported “finance” as their #1 business problem (down 1 point). Pre-1983, as many as 37 percent cited financing and interest rates as their top problem. The percent of owners reporting higher interest rates on their most recent loan was seven percent, while three percent reported lower rates. The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted net negative 15 percent (more owners expect that it will be “harder” to arrange financing), Regular borrowers (accessing capital markets at least once a quarter) continued to report difficulties in arranging credit at the highest frequency since 1983. A net 15 percent reported loans harder to get than in their last attempt, unchanged from November. Still that is not nearly as severe as the financial distress reported in the pre-1983 period. Twenty-four months of recession have sapped the financial strength of many small firms. Thirty-three (33) percent reported regular borrowing, fairly typical of post-1983 and unchanged from November. Eight percent of all owners reported that their borrowing needs were not satisfied, down two points from November. The remaining 92 percent of all owners either obtained the credit they wanted or were not interested in borrowing. Only 4 percent of the owners reported “finance” as their #1 business problem (down 1 point). Pre-1983, as many as 37 percent cited financing and interest rates as their top problem. The percent of owners reporting higher interest rates on their most recent loan was seven percent, while three percent reported lower rates. The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted net negative 15 percent (more owners expect that it will be “harder” to arrange financing).

The NFIB report might be a bit more negative than the Atlanta Fed’s but overall it doesn’t seem to indicate that the country’s small businesses are suffering all that much from a lack of bank credit. Given that some percentage of the firms reporting a problem with obtaining financing probably have impaired balance sheets as a result of the recession, it’s likely that the true number of those who are suffering from a lack of availability to bank loans is smaller than the reported numbers.

So why is the Obama administration making such a big deal of this issue. The constant refrain is that we need to get banks lending again and to this end they plan to sprinkle the local banks with billions of TARP money. Since TARP money has ostensibly not induced the large banks to lend while will it induce the small banks to do anything differently? And, if only a small percentage of firms indicate a problem with accessing bank credit why not look elsewhere for places to employ this money or better yet return it to the Treasury as the law seems to require.

You need not puzzle over this too long. Remember that it’s hard to find someone more tied into the local economy and the local politics of that economy than small bank executives. In many cases they’re the pillars of their communities, have money to spread around and odds are that they’ve rubbed elbows many times with the politicians that represent their districts. Just the sort you don’t mind directing a little bit of stimulus towards with mid-term elections looming.