Are Banks Lending to Small Businesses?

May 12, 2009

The media has been quick to point out instances where banks have stopped lending to small business clients, either by reducing or eliminating lines of credit, changing terms, upping APRs, or simply refusing loans. The truth is that lending demand has also slowed appreciably, at the same time that banks are looking for ways to reduce risk.

But given all the bad press that is out there, banks are making sure that prospects and clients alike are seeing them less as the villains in a down economy, and more as partners who are in it for the long haul.

Today, to help manage its image despite its crippling losses, Citigroup announced that it is using its TARP monies to fund nearly $45BN in loans. While it is making loans to local governments, municipalities, universities and non-profit hospitals to stimulate local growth, Citi points out that it has been making loans to small businesses as well as consumers. According to the report, “New lending to U.S. individuals and families, small and mid-sized businesses and large corporations, along with underwriting activity, totaled $120.1 billion in the first quarter of 2009, up from $81.2 billion in the fourth quarter of 2008.”

So what does that mean for small businesses specifically? According to Citi, small business loan balances outstanding rose from $1.1BN in March 2008 to $1.3BN in March 2009. Not much of an increase in the grand scheme of things, but $200MM is enough for Citi to report that it is lending, just like its peers.

The full report, which has the catchy title, “What Citi is Doing to Expand the Flow of Credit, Support Homeowners, and Help the U.S. Economy,” can be found on Citi’s website.

Reinventing Loyalty

January 23, 2009

Findings from EMI’s National Study

Customers may be satisfied with their banking relationships, but that satisfaction doesn’t always translate into more revenue or deeper relationships. And in today’s economy, acquiring new relationships while growing current ones is becoming an increasingly high-stakes game.

In EMI’s national consumer study, we uncover the role that loyalty programs play in acquisition and retention. What we found is that banks still have a long way to go towards turning loyalty into deep and profitable relationships:

Only 9% of consumers stated that loyalty is the most important reason for remaining with their primary bank or credit union
69% of consumers have a primary credit card issued by a financial institution other than their primary bank, and they cite a better rewards program as the most important reason for looking elsewhere
Of the minority who have credit cards issued bt their primary bank, a high percentage of consumers chose the card simply out of convenience

The new era of responsible marketing

January 22, 2009

Barack Obama has captured many hearts and minds in our nation. What does his call for responsibility and action mean for marketers–those of us who focus on driving growth and loyalty?

Our new President said, “On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.” Doesn’t this describe our most important goal as marketers? Creating a unity of message and purpose among our sales and service professionals who deliver our value to customers? An honest and consistent approach that meets customer needs, and a sincere desire to do so with an experience that is the best…these make for competitive advantage and the power to prevail and succeed…even through these challenging times. Leadership is made of this.