Are Small Businesses Being Squeezed By Bank Mergers And Acquisitions?
Small business lending is “relationship lending,” a practice of lending that is high-touch, where a lender takes the time to get to know the business owner and the business of his business. Small business owners tend to rely on this type of lending rather than larger business owners. According to information published in the Small Business Advocate, a publication produced by the SBA Office of Advocacy, there are nearly 5,000 fewer commercial banks today than in 1990. For many of these remaining larger banks, “relationship lending” is a casualty to progress, leaving the small business owner with fewer and fewer channels to credit. Many new banking entrants, non-banking financial institutions, and credit unions have stepped forward to fill the small business lending gap left as the result of these mergers and consolidations in the banking industry. According to CUNA’s Year-End 2006 Operating Ratios Report, 12.1% of PA’s credit unions now offer MBLs compared to 10.9% of the state’s credit
Related Questions
- Why do bank mergers, acquisitions, and expansions present a strategic opportunity to encourage banks to enhance their product/service offerings to traditionally underserved groups?
- How are bank mergers/acquisitions different than corporate mergers/acquisitions in other industries, or are they?
- Are Small Businesses Being Squeezed By Bank Mergers And Acquisitions?
