The Go-Go State of the SMB Credit Market: Everyone’s Building a Bigger Boat

As the COVID-19 crisis transforms from pandemic to endemic, among the many things it vastly transformed has been SMB lending.  

May 10, 2022 – Prior to the pandemic, lenders tended to be ambivalent about the small-and-midsize-business credit market: aggressive about it when times were good and cold to it during bad times. Going back to the global financial catastrophe of 2008, financial institutions have been ambiguous in their organizational strategies about where SMB loans of different sizes are to be handled. But FIs’ ambivalence about SMB lending all but vaporized with the pandemic in general, the Paycheck Protection Program (PPP) in particular, and the cultural awareness of the importance of SMBs in the fabric of society.

This report identifies the dominant trends in the SMB credit market, including lenders’ sought growth rates, their views on subsegments in the market, their plans for automation, and their take on macroeconomic conditions in the credit market. This report is based primarily on interviews with highly qualified lending professionals and executives with in-depth knowledge of their FIs’ activities in the SMB market. The report’s content also utilizes publicly available information garnered from the FDIC’s website.

This 28-page Impact Report contains 13 figures and four tables. Clients of Aite-Novarica Group’s Commercial Banking & Payments service can download this report and the corresponding charts.

This report mentions Axe Finance, Baker Hill, Biz2Credit, Blooma, Ezbob, Finastra, FIS, ForwardAI, Global Wave Group, Intellect Design Arena Ltd., Jack Henry & Associates, JUDI.AI, Lendio, Linear Financial Technologies, Linedata, Loxon Solutions, Moody’s Analytics, Nucleus Software, Numerated, Oracle, Plexe, Q2 Software, SmartBiz Loans, Sopra Banking, and Temenos.

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