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FIXING SMALL BUSINESS LOAN PROFITABILITY: ANALYSIS AND RECOMMENDATIONS FOR LENDERS

September 17, 2019 | (12:00PM)
USA (United States of America)
Lending to small business is expensive because of origination, underwriting, capital, and many related costs. Most banks lose money when they make a business loan below $250K. In some cases banks avoid making small loans, missing out on a relationship opportunity and providing an inroad for Fintech lenders. Other banks either do not understand their loan economics or accept their losses, relying on deposits and the sale of other services for relationship profitability, a risky approach.