One bank that has been aggressive on this front is the $14 billion-asset ServisFirst Bank in Birmingham, Alabama.Ībout 10% of the bank’s first round of PPP loans went to small businesses that were new to the company, said Paul Schabacker, executive vice president at ServisFirst. “Transactional relationships don’t last,” he said. Hartman implored banks to act now to develop broader relationships with those customers. It’s too early to tell who is winning that race, he added. The government-backed loans are fully forgivable for borrowers who meet certain criteria.įor the banks that served as conduits, one of the biggest opportunities lies with small-business clients who first came to them for a PPP loan, either out of frustration with their existing lender or to seek out their first loan, Hartman said. More than 11.8 million PPP loans totaling nearly $800 billion were made between April 2020, when the program first launched, and its closing in May 2021.
RESTAURANT RUSH SALTILLO HOW TO
“Most institutions still do not know how to service small-business relationships adequately,” Hartman said. Too often, he said, these business owners would be funneled to bigger corporate banking units with complicated products they often didn’t need - or to the retail banking side, which is more tailored for consumers. Neil Hartman, a senior partner in West Monroe’s financial services practice, said the PPP was a wake-up call for banks that needed to improve their handling of small-business clients. Roughly two-thirds reported a positive change, versus only 21% who reported a negative one, according to a report the firm published in October. In April, the consulting firm West Monroe Partners began surveying 401 small-business owners about their PPP experience and whether it changed their perception of their lender. “Their success is clearly demonstrated in our results, as the third quarter is our most successful quarter from a loan growth standpoint since prior to the pandemic.”Įxcluding PPP forgiveness, the $48 billion-asset BancorpSouth reported loan growth of 3.3% between the third quarter of last year and the same period in 2021. “The decision to sell most of our PPP portfolio has allowed our relationship managers to have a renewed focus on calling efforts and generating new business,” BancorpSouth Chairman and CEO Dan Rollins said during an Oct. Though Owen said he isn’t looking for new products just yet, his bank has already shown that other small-business owners are.
RESTAURANT RUSH SALTILLO FREE
The idea was to free up relationship managers from the tedious loan forgiveness process to get a head start on churning out new business. Owen’s bank, BancorpSouth, decided to sell $725.4 million of its PPP loans in the second quarter. “At the very least, many small businesses are on a first-name basis with their bankers now,” said Holly Wade, executive director of the National Federation of Independent Business research center, which is planning to conduct surveys about whether these relationships are expanding as the program fades.
And small-business advocates are hoping the aftermath of the pandemic will usher in more opportunities for an often overlooked sector. Consultants are stressing to lenders the need to retain specialized small-business teams. Small-business owners are upbeat in surveys about how their lenders handled the PPP - in spite of early negative press the program received.
While it’s too soon to tally the effects for banks, early returns are promising.
0 kommentar(er)
