Small Business Credit Outlook

January 11, 2018

Small Business Credit Outlook

 

Recently, PayNet, Inc., a national expert in small business credit data and analysis, released a Small Business Credit Outlook from Q3 2017.  We found a number of interesting takeaways for community banks, and summarized our key conclusions. You can access your own free copy of the report below.

 

  1. Economic growth is being driven primarily by two sectors of the economy: large corporations and high tech companies. Unfortunately for community banks – these aren’t your bread-and-butter customers. Privately-held businesses – the customers you’re looking for – are treading water. 
     

  2. The demand for new debt from privately-held business is not robust, so don’t expect much in terms of new debt from your existing customers. If you’re trying to grow your portfolio in 2018, you may need to work harder at identifying new opportunities.
     

  3. Businesses that aren’t currently banking with you likely aren’t adding new debt either, but look for new opportunities through refinancing existing debt. This can be a great time to strategically use the SBA. You may be able demonstrate enough benefit to get a business to come over to your bank – think longer terms with lower payments that allow a business to build and save cash without expanding debt.
     

  4. Monitor your existing customers closely. Although private companies aren’t performing poorly, things are just lukewarm. Delinquencies and defaults are slowly inching upwards.
     

  5. If you see signs of trouble, act early! Don’t wait until payments are more than 30 days past due, and don’t wait until the tax returns come in to dig into the financials. 

 

Access the Report: Small Business Credit Outlook Q3 2017

 

Give us a call if we can help you support your business customers, especially with opportunities to use the SBA to refinance existing debt, or to make new loans when collateral falls short. Learn more about VITAL Financial Services.