Survey: Banks expect more commercial lending in 2014
Raleigh, N.C., May 15, 2014 — April’s jobs figures created fresh optimism about the strength of the economy and, according to a new survey, banks are prepared to support U.S. business expansion. Financial institutions are planning to make more loans to businesses in 2014 than in 2013, according to the new survey by Sageworks, a financial information company.
Sageworks surveyed 417 banking and credit union professionals who work closely with their institution’s lending portfolio, and 67 percent of them said their institution would either be making more or significantly more commercial loans this year. Only 3 percent of respondents said their bank or credit union would be making fewer (or significantly fewer) loans. About one in five said their institution plans to make about the same number of commercial loans as last year.
Recent data from Sageworks show that privately held companies have been generating solid revenue growth and are showing signs of strong profitability. “The health of these companies may indicate an ability to take on debt,” says Tim McPeak, a director in the Financial Institutions Division of Sageworks. “There’s a possibility that banks and credit unions may be recognizing this slow but steady improvement on the income statements and balances sheets of privately held companies that are applying for loans.”
Sageworks also asked about businesses’ general access to credit so far this year as compared to 2013 and found that financial institutions’ perception of the overall environment appears less optimistic than the lending outlook at individual banks and credit unions. Nearly half of the financial professionals surveyed said that businesses currently have the same access to credit as last year, and 3 percent of those surveyed think that businesses have less access to credit. Thirty-seven percent said businesses have greater (or significantly greater) access to credit so far this year.
“While nearly half of respondents think that the credit environment overall is unchanged for businesses, 67 percent of these same respondents are predicting more commercial lending activity at their specific institutions,” says Chuck Nwokocha, director of advisory services for Sageworks. “These data suggest that there is a disconnect between the perception of the overall credit environment and the individual plans for lending at credit unions and banks.”
About the Survey
Sageworks conducted the online survey between April 21, 2014, and April 26, 2014, collecting responses from 417 bank and credit union professionals from approximately 300 unique financial institutions. The poll’s respondents were all clients of Sageworks and were not randomly selected.
Sageworks is a financial information company and the leader in the analysis of privately held companies. The company provides risk-management solutions to financial institutions and financial analysis and benchmarking applications to accounting firms and private companies. Sageworks’ data and applications are used by thousands of accounting firms and financial institutions across North America and internationally.
Data & Research Team, Sageworks