Subscribe to Inc. magazine
WIRE

Small Business Lending Beyond Big Banks

Need a loan for your small business? Forget the big banks. Small, community banks may provide a more compelling option.
Advertisement

If you need bank financing, recent reports indicate that big banks may not be your best option.

Lending at the nation’s largest bank, JPMorgan Chase, dropped 1% in July through September from the three months prior, Fortune reported last week. Commercial lending at Wells Fargo was also down compared to the second quarter. And while lending actually increased at Citigroup by $4 billion, deposits did too, by $30 billion.

But outside of the bulge bracket, there are still many banks that are eager to provide loans to small businesses, InvestorPlace recently reported.

For example, commercial loans at Wintrust Financial, an Illinois-based holding company operating primarily in the Midwest, reportedly increased by $530 million in the first nine months of 2012 to $2.7 billion. At North Carolina-based First Citizens Bancshares, small business commercial loans reportedly totaled $7.8 billion or 58% of its total loans through the end of June.

According to data compiled by the Federal Deposit Insurance Corporation in the second quarter, small and medium-sized banks control 54% of the market share in small business lending.

Inc.’s Burt Helm recently offered several simple strategies for approaching bank financing, including considering a community bank.  

"The interest rates could be higher, but small banks have the flexibility to tailor loans to your needs," he explained. "If you're a more important customer for them, they will be more likely to work with you if business goes south."

 




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: