Small business is growing in the U.S. adding more jobs than large businesses. The small business lending market in the U.S. has an estimate value of $186 billion and small businesses are increasingly seeking lending from banks, credit unions and alternative lenders.
Financial documents, profit margins, operating costs, sales cycles and more vary not only by industry, but by invididual small businesses. Lenders need the business acumen to understand the full financial picture of a business in order to be a valuable lending partner.
Successful lenders have the business acumen to ask smart questions and use a variety of analysis tools to assess the the needs of each business quickly. They also not only to structure a credit package to meet the borrower's needs, they make useful suggestions to improve the financial efficiency of the business.
The most successful small business lenders are constantly learning the "why's" behind approved and declined loans. This learning needs to be fostered by managers to improve lending abilities. With increasing understanding of small businesses' needs, lenders become partners that small businesses trust.
Because most small businesses may be willing to pay more for credit in order to secure the capacity they need, the spreads on these loans are often larger than the spreads for mid-market or commercial loans.
...the small business is paying higher-than-average merchant fees on credit and debit card transactions. By bundling merchant sevices within a full relationship with the financial institution, the lender may be able to offer more attractive pricing.