At the start of 2010, Huntington Bank committed to lend $4 billion over three years to small businesses in its footprint, joining leading banks like Chase, Bank of America and Wells Fargo in making specific small business lending commitments.
Huntington reported yesterday in a press release that it lent $1.1 billion to small businesses in 2010, with an acceleration in this lending in the second half of the year, which the bank attributed to an improving economy as well as the completion of its hiring of 150 additional business bankers. Huntington claims to be on track to meet its three-year goal.
This press release follows news in recent weeks that Chase and Bank of America both met their 2010 small business lending commitments. Wells Fargo fell short of its target, although it still grew small business lending by 15% in 2010, and reported strong growth in loan demand from small businesses in the second half of the year.
It should be noted that small business loan balances for many large banks continue to decline year-over-year, as charge-offs and paydowns outstrip origination. However, we may be on the cusp of an inflection point , with declining charge-offs and increasing originations leading to overall growth in small business loan portfolios in the coming quarters.
The sales and marketing challenges for banks aiming to capture a share of the small business market include:
- Positioning themselves as a financial partner to small businesses, providing both financial products and advice
- Revisiting the small business product portfolio to ensure that it addresses the changing financial needs of small businesses
- Developing offers and bundles to reflect banks’ renewed focus on relationship optimization
- Ensuring that all service channels (branch, call center, Internet, mobile, social media, etc.) deliver a consistent customer experience
- Recruiting, training and developing support tools for dedicated business bankers
- Implementing programs and process for other branch personnel to sell to small businesses and/or refer them to business bankers