Lending Picks Up for Small BusinessesADVERTORIAL: Banking Forecast Supplement Monday, November 12, 2012
I expect the improvement seen in San Diego and Southern California during 2012 to continue in terms of banks increasing lending to small and mid-sized businesses, entrepreneurs, real estate investors, and professionals. We anticipate that 2013 will bring increased demand for loans across all sectors. Our loan fundings for the first three quarters of 2012 have increased 176 percent compared to the same period of 2011. Additionally, our loan pipeline has grown throughout the year and is $100 million higher than at March 31, 2012. Income property investors have been actively managing their portfolios, both repositioning and refinancing their assets. The volume and pace in this sector is significantly higher than one or two years ago. In terms of business credit lines, term loans, and acquisition lines and loans, businesses are coming to us more frequently and with greater need. They are looking for capital funding for acquisitions and expansion. The increase in requests is supported by an improvement in the quality of the opportunities that our business clients are pursuing. Our clients have improved their position over the past year and we expect that to continue. While many businesses have appeared to be just treading water and waiting for the economy to turn, they have also become leaner and more focused generally.
Entrepreneurs and business owners who have actively managed their businesses during the economic downturn know their businesses well. They didn’t sit on the sidelines the past four years hoping to ride out the storm and get lucky enough to have business return normal. They have a cohesive plan and vision for growth. These businesses can get financing. There are financial institutions that are partnering with businesses and providing the capital that businesses need to grow and succeed. Businesses will find that many community banks went through a similar process of self-evaluation over the past several years and are delivering better efficiencies and now outwardly focused looking to partner with and provide capital to strong viable businesses.
Businesses owners should talk with their banker and ask if the bank is partnering with businesses and making loans. There are a number of attractive loan programs available today, programs backed by the SBA, other programs supported by not-for-profit development corporations like California Southern, and some internally developed and sponsored by individual banks, such as Opus Bank’s Enterprise Lending Program. If an entrepreneur or a business is looking for financing and is not hearing about these programs and just hearing “No”, that entrepreneur or business isn’t being valued by their banker.
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