Commercial Lending Trends: What Business Owners Need to Know

Getting a business loan can be a giant puzzle for a business owner and the answer is knowing the right pieces and how they fit together. One key piece is understanding the latest trends in commercial loans. These trends can change as lenders adapt to new ideas, economic shifts, and government regulations.

Knowing about these trends gives you a better view of the resources available to you. This creates the ability to plan better, get better deals, and feel confident when talking to lenders. Let’s explore business loan trends in 2023, how they could impact your business, and ways to make them work in your favor.

Big Trends in Commercial Loans for 2023

Noteworthy shifts are occurring in the commercial lending landscape. Here are some of the top trends of 2023:

·                Interest Rates Going Up. Banks are witnessing better returns, thanks to wider interest spreads brought by rising interest rates. With higher interest rates, you may have to pay more for your loans.
·                Going Digital. The pandemic has spurred a rapid shift towards digital lending platforms. More banks are using digital technology to make their services better and cheaper, and with digital technology, you can get a loan faster and easier.
·                Thinking About ESG. Lenders now consider Environmental, Social, and Governance (ESG) factors when making lending decisions. If your business practices align with ESG factors, it improves your chances of loan approval.
·                Using Varied Data. Banks are using new information, such as social media, to determine if a business can repay a loan.
·                More Choices. The emergence of fintech and non-bank lenders has intensified competition. With more businesses offering loans, banks try to be unique by offering new products and better services. More loan providers mean you have more options and a better chance of getting the best deal.
·                Increased Regulatory Scrutiny. Lending practices are under closer inspection as regulators level up consumer protection. On one hand, you can expect more regulations ensuring loan arrangements are fair for customers, on the other hand, banks might ask for more information about you and your business.
Using These Trends to Help Your Business
Knowing these trends is one step, but using them to help your business is another. Here’s how:
·                Plan for High Interest Rates. Review your financial goals and ensure you can afford higher repayment costs. Always consider interest rates in your budget so you’re prepared, avoiding high costs that catch you off guard. It’s also a good idea to explore options such as refinancing if the rates get too steep.
·                Embrace Digital Platforms. Be prepared with digital copies of important documents for easy uploading, benefitting from the convenience offered by digital lending. Take advantage of digital tools and resources, such as loan calculators and online customer service to make your journey to a loan smoother and more manageable.
·                Align with ESG Principles. Show lenders your commitment to ESG principles. Demonstrating that your business is responsible and cares about the environment, society, and good governance can impress lenders and could improve your loan prospects.
·                Establish a Digital Footprint. A positive online presence can support your loan application. Keep your business’s online image clean and professional.
·                Shop Around. Use the competition among lenders to your advantage. Explore different loan options before settling for one taking your time to find the one that fits your business needs and budget.
·                Stay Informed About Regulatory Changes. Knowing your rights and understanding regulations can protect you from unfair lending practices. Keep an eye on new policies or benefits that may be introduced.

A Partner Amidst the Wave of Change

Learning about commercial lending may seem cumbersome, but understanding the latest trends makes it more accessible. Using these trends to your advantage as a business owner can help you get the right loan for your business.

Changes such as more digital tools and stricter rules are shaping the future of business loans. They show businesses that they need to be more flexible when getting financial help.

At Woodsboro Bank, we know all about these changes, and we are working hard to provide the best service by staying up-to-date and adapting to the needs of our customers. We’re not just here to provide you with a loan; we’re here as a trusted partner and source of excellent service, professional advice, and solutions that fit your business.

Becoming a part of Woodsboro Bank is not just about getting a business loan; it’s about joining a community committed to your success. We have the tools you need to grow your business and reach your goals.

Why wait? Talk to us today. Let’s discuss your needs, explore your options, and find the perfect loan. With Woodsboro Bank by your side, your business is set for success. Contact your local branch for more information.


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