Lack of Staff, Qualified Borrowers Limit Bank SBA Lending

Main Street Monday — Lack of Staff, Qualified Borrowers Limit Bank SBA Lending
October 7, 2024
by Bob Coleman
Founder & Publisher

The FDIC’s 2024 small business lending survey offers a treasure trove of intelligence for senior management in managing its lending department and portfolio. 

The number one reason cited for not participating in SBA lending programs is the demand factor, or the failure to find borrowers who qualify.

Another major factor is the difficulty in obtaining the expertise and personnel needed by the lender to successfully manage these programs.

Smaller banks have a more difficult time mitigating these factors than larger banks.

Other factors cited by lenders that limit their SBA lending activities include:

– Concerns about compliance with origination guidelines

– Concerns about compliance with servicing guidelines

– High administrative costs

– Other regulatory concerns

– Non-personnel high startup costs

– Difficulty of participating in the secondary market

– Concerns about credit risk