Direct lenders are working to outstrip them. Credit unions are starting to catch up to them. They are…banks.
It’s not an exaggeration to say that banks have suffered major blows over the last couple of years. Smaller ones have been shuttered, larger ones have been bailed out by the federal government and faith in the once-bedrock institutions of American financial life has been shaken like a James Bond martini.
Given that, it’s little surprise that many banks are emulating turtles right now, ducking into their shells at a time when small businesses and their larger cousins sorely need lending. It’s not surprising, but it is creating a void, and it is not helping those businesses get a leg up.
I’d be remiss if I didn’t point out that there are active lenders out there. At Direct Capital, we’ve seen consistently high volume since the beginning of the year among a host of verticals, many of whom are seeking small business lending and working capital* to grow their businesses. With banks lending less, the gap must be filled.
Credit unions are gaining a lot of steam, too, though they’re in no danger of overtaking banks in the immediate future.
For the immediate future, this shows little sign of changing. Banks are gradually opening up their lending vaults and are being helped by an infusion of cash from the federal government, but a landscape shift isn’t really possible so long as the job market and the general economy falters.
In the meantime, tell us your stories of dealings with banks. Have you been able to get the lending you need?
Photo credit to frko at http://www.sxc.hu/photo/962334
*Working capital not available in the following states: AK, DE, ND, VT