Local banks see small-business lending surging

Back to TopCommentsE-mailPrintBookmark and Share

Chase and Fifth Third Bank opened their small-business loan spigots in Indiana late last year in a sign the economic recovery is taking hold among the state's smaller businesses.

Other banks, such as Old National Bank, suffered another decline in small-business loans last year, but say the pace is ramping up this year, as companies get more aggressive on expansions, capital expenditures and even acquisitions.

"A lot of people were sitting on the sidelines, waiting to jump back into the game," said Tim Oliver, head of New York-based Chase's business banking in Indiana, which handles loans for companies with $20 million or less in annual revenue. "I think people are much more confident today than they were back in that 2009 time frame. They’re seeing a lot more positive signs that things are really starting to recover."

Local bank lending to smaller companies peaked in 2007 and 2008, then took a nosedive after the September 2008 meltdown on Wall Street. But the federal government declared that the recession ended in mid-2009, and the economy has been recovering very slowly since.

Even unemployment has started to trend downward in recent months, slipping below 9 percent nationally in March. Unemployment stood at 9.4 percent in Indiana as of February, the most recent figure available.

Chase's loan volume to its smaller corporate clients surged 57 percent last year, to $263 million, after taking a big plunge in 2009. The bank said it could not provide Indiana figures for 2008 because it did not track small-business lending by state before 2009.

The pace of small-business lending is just as hot this year, Oliver said.

Fifth Third saw a similar increase—56 percent—in its loans to Indiana companies with $20 million or less in annual revenue. The Cincinnati-based bank declined to disclose its total dollar amount of small-business loans, but said it is expecting another 50-percent increase this year.

"Companies have been hoarding cash. Now that we’ve seen positive signs in the economy, a lot of those companies are starting to invest in upgrading equipment and hiring new people," said Todd Flick, a senior small-business lending executive for Fifth Third in Indiana. "They’re willing to spend some of the money that they’ve got on their balance sheet and that they’ve got on deposit with the bank."

Randy Reichmann, president of the central Indiana region for Evansville-based Old National, said he saw business owners get more confident a year ago, but then get fearful again after the financial crisis in Greece spooked markets worldwide. Late last year, things started to pick up again, but not in time to spare Old National from a 3.3-percent decline in its small-business lending, which aims at companies with $5 million or less in revenue.

The bank's loans to those companies last year totaled $163.2 million, down from more than $172 million in 2008. But, this year, things are definitely growing. Reichmann expects to see businesses start borrowing again for new equipment and real estate purchases.

"They’ve cut a lot of expenses out. It’s making deals easier to get done," he said. "I think there’s a tremendous amount of pent-up demand for capital expenditures. That’s on both small and large businesses."

Local banks are hiring more to deal with the rising loan volume. Chase added six bankers to Oliver's small-business team this year—now 32 strong—and expects to add another six by year's end. Meanwhile, Fifth Third has hired two new people to help with underwriting loans and three new bankers. It also expects to hire one more banker by year's end.


  • small biz lending & bankruptcy
    One of the tragic aspects of small business bankruptcy is that lending has been so tight, so that business that might have survived did not. With the availability of loans improving, I see more hope for successful emergence from bankruptcy, rather than it meaning the end of the story.

    Indianapolis Bankruptcy Law Firm

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1