How Much Are Major Bank Lenders Pulling Back?

In times of economic uncertainty, it’s customary to witness a tightening of credit policies at banks precisely when customers are most in need of credit. But have we reached that point yet?

In a recent study conducted by Secured Research focusing on bank-owned commercial finance companies* specializing in small business finance, data collected from 122 providers in March revealed significant shifts since January, including:

  • 59% of these entities have slashed their app-only amount limits.
  • 62% have heightened their Time in Business (TIB) requirements.
  • 40% have raised their minimum deal size threshold.
  • 39% have bolstered standards for historical financial strength.
  • 68% have tightened fraud verification protocols.
  • A staggering 69% have curtailed the volume of broker business they are willing to entertain.

Indeed, credit standards at banks are evolving, gravitating toward a more risk-averse stance. Larger transactions are expected to be pristine with meticulous documentation, while smaller deals may find themselves overlooked entirely. Now, more than ever, brokers must exude confidence in their array of finance capabilities and adopt an assertive approach in a market where access to capital is swiftly dwindling.

As the landscape shifts, brokers must adapt and strategize accordingly to navigate the changing terrain successfully.

*Equipment finance, working capital and commercial real estate finance companies not affiliated with general relationship banking and part of banks with more than $75 billion in assets

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Terry Mulreany
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Susie Angelucci
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