Small Businesses Seek Financing from Established Relationships

Earlier this spring the Small Business Credit Survey (SBCS) released findings from its 2018 survey, conducted in Q3 and Q4. The SBCS is a collaboration of 12 Federal Reserve Banks, and results are based on the responses from more than 6,600 small employer firms. Information is collected about business performance, financing needs and choices, and borrowing experiences of firms with fewer than 500 employees. While the SBCS is not a random sample, it sheds light on cumulative lending trends.

Of note, the survey found that more often, applicants chose a lender based on their existing banking relationship. In fact, 65 percent of those who chose a small bank for their lending did so based on their existing relationship with the bank, versus 31 percent of those who went with online lenders and 58 percent who went with large banks.

Here are some other highlights from the survey:

-A majority reported revenue growth and one-third reported adding employees in 2018.

-Credit demand remained steady last year, with over half of those surveyed seeking out new funding.

-Results indicated that overall satisfaction levels were higher with small and large banks versus online lenders.

If you are looking to retain more working capital and improve the cash flow of your small business, we’d love to start a conversation about your needs and how we can help. Learn more about Allegiance Bank SBA lending.