Inflation, interest rates, and supply chain issues dominated the news during the first quarter of 2023 and presented new challenges for business owners across the country. As in prior years, loans and funding play a crucial role in helping business owners navigate uncertain economic times. However, talks of a potential recession, interest rate fluctuations, and the increasing market unpredictability caused banks and traditional lenders to “tighten up” during the first quarter of 2023. The shifting economic landscape has made it difficult for small business owners to take out loans and access money the way they did before.
Despite the challenges, our team of experts was able to help small business owners get almost $4 million in funding to help them grow. Continue reading to see how our lending options kept business moving forward during Q1 2023 and learn about recent changes to the SBA lending process.
$3,837,900 In SBA Loans Funded
From January – April 2023, Fidelity Bank helped business owners secure almost $4 million in funding to start, grow, or expand their businesses.
SBA 7(a) loans were the most popular loan for business owners this quarter, likely due to the flexible financing options for a variety of business purposes, including capital and equipment purchases.
However, SBA 7(a) loans aren’t the only option business owners have! The SBA 504 loan, USDA loan and Express Line of Credit can also help you get the funding you need to start, grow or expand your business.
Challenging Lending Environment
Traditional bank loans, credit cards, lines of credit, and other means to access capital quickly are often a lifeline for small business owners, especially during a period of market unpredictability. However, these methods are often out of reach for small business owners who no longer meet the loan requirements when lenders increase restrictions as they did in Q1 of 2023.
The good news is that the Small Business Administration (SBA) isn’t as influenced by market volatility and actually relaxed lending requirements this year, making it easier for business owners to access capital.
If you have questions about the SBA loan process or are interested in seeing if you could qualify, reach out to our team of experts and start a conversation! Click here to get started.
Top SBA Loan Questions During Q1 2023
The SBA loan process witnessed several notable changes in Q1 2023, including enhanced loan programs, streamlined forgiveness processes, a focus on underserved communities, and increased collaboration with lenders. We sat down with members of our Government Guaranteed Lending division to get answers to the most asked questions during Q1 and get insight into current market conditions.
How Is The Market Shaping Business Lending Opportunities?
In the current environment, some banks are not doing any SBA or commercial lending until the market stabilizes. The banks that are still lending have built in extra requirements for equity injection, increased the contingency for construction projects, and are being very selective on the types of deals they want to pursue.
What Can Business Owners Do To Prepare For The Loan Process?
A well thought out business plan and projections are very important. Projections should be based on true expectations (rather than “worst case” or overly optimistic scenarios) and include all relevant expenses, such as payroll costs, insurance, accurate rents, etc. Your banker should also be able to understand how revenues are projected.
The SBA funds several resources such as SCORE and SBTDC to help entrepreneurs put these together. You can also speak to your banker about industry benchmark information. Borrowers should take these items seriously. Bankers want to see that the borrowers have given thought to how they will run their business.
How Can Business Owners Improve Their Chances Of Loan Approval?
Borrowers should pay attention to their credit score, credit history, and credit utilization. Take advantage of free credit report resources to understand how the bank will perceive your payment and debt utilization history. If the report has issues, dispute them before you apply for a loan. Borrowers should also proactively discuss their credit history with the banker BEFORE the bank pulls their credit report.
What Are Lending Trends To Watch Out For In 2023?
Credit is tightening in general, even if every bank is not tightening in the same way. Borrowers should be prepared to fully explain how they will utilize any borrowed funds (especially working capital) to improve their bottom lines.
Is Fidelity Bank Stable?
Fidelity Bank is safe, sound, and well-capitalized. We are and have been a safe haven since 1909, surviving the Great Depression, the Savings and Loan crisis, the Great Recession, and World Wars. Our balance sheet is built so that we can be here for at least another 100 years. Click here to learn more about our history and commitment to being Right By You.
Have other questions? Follow Fidelity Bank on LinkedIn for more tips and information on the SBA lending process and to connect with our team of experts.
We Help Small Businesses Think Big
In today’s economic climate, business owners need a bank and lender that they can rely on. Our dedicated team of lenders helps businesses across the United States secure the funding they need faster.
As a Preferred Lender, we can manage the loan process from start to finish without having to submit an application through the SBA first. This can save weeks in processing time. Our responsive and personalized service is what’s helped rank Fidelity Bank among the top ten SBA lenders in North Carolina.
Click here to learn more, or get in touch with an SBA lending expert and learn how an SBA loan can help you reach your goals.
