The state of small business banking

In this weekend's edition of Bank Vault, we're highlighting small business banking. Bankers who attended our Small Biz Banking conference this week talked about a number of pressing issues: regulation, new CFPB rules, digital banking, online account opening, and more. Plus, we looked at the SBA's 7(a) program and ranked the biggest lenders. And check out our editorial research on the state of small business banking.

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Exclusive research: With small clients comes great potential. Small business clients are important to financial institutions and expected to drive growth. But to achieve that, banks must teach them to be stronger consumers.

New census data hints at slower pace for small-business formation: A key gauge of activity that tracks startups most likely to create jobs declined in October, potentially signaling the start of a slowdown after the rapid increase in interest rates. It presents a red flag for community banks and credit unions that are major lenders to small businesses.

Resilient small businesses bolster community banks' credit quality: But high costs and any downturn in the economy could weigh on lenders and their commercial borrowers in coming months, economists caution.

Small-business bankers share their tech priorities: Executives at Capital One , U.S. Bank , BMO U.S. and Atlantic Union Bank are striving for seamless onboarding and more efficient branch bankers, among other projects on their technology drawing boards.

'Staying in touch with the front line:' lessons from Chase for Business CEO Ben Walter: Don't underestimate how lonely and messy entrepreneurship is, 摩根大通 's Ben Walter said at American Banker's Small Biz Banking conference.

Why banks' retail units should care about small businesses: Bankers should stop thinking of small companies as difficult to serve, Comerica Bank 's Brian Haney says; "How does succeeding in small business make the retail bank stronger?"

SBA 7(a) loans are getting smaller: Since the end of the Small Business Administration's 2022 fiscal year, the average loan size in its flagship program has dropped more than six figures. The addition of three new nondepository lenders could further drive down this figure.

Read more on SBA loans: Top 20 SBA lenders for 2023

SBA's newly licensed nonbank lenders will focus on growth: This month the Small Business Administration followed through with a controversial policy change by granting access to its flagship 7(a) program to three additional nonbank lenders. These new participants vowed to ramp up their small-business lending efforts.

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