The growth rate of bank loans has slowed over the last three months for small to midsized businesses in general and for wholesale distributors in particular as economic and political uncertainties cause business leaders to ease up on their growth accelerators.
“We started to see a slowdown in the summer,” says Jordan Peterson, senior vice president and business banking credit manager at PNC Bank. “In July, we started seeing a lower volume of applications for loans. We’ve been talking with our bankers about what they’re seeing out on the street. It mirrors what we’ve been seeing in the economic outlook surveys, and it’s also in sync with what we’ve been hearing from our customers. They’re hesitant right now. They’re concerned about the economy.
“And they’re looking at the upcoming election and wondering what government is going to do to help small business.”
Post-recession business has resumed for some wholesale companies in some sectors, but the recovery for wholesalers has been spotty.
“Whether they’re feeling optimistic and looking to grow depends on the type of wholesaler they are and the type of industry they service,” Peterson says. “Some are doing well and are optimistic. Others are still waiting for things to improve. An example would be wholesalers that sell building construction materials. They are still waiting for things to recover and get back to normal.”
Peterson says wholesalers and other businesses looking to take out loans to grow their businesses should take a dim view of recent reports that banks are currently in a tight-fisted frame of mind when it comes to lending.
“Wholesalers and others have probably heard on the radio or seen in the papers that banks are hesitant to lend right now,” he says. “But they should know that, in fact, banks are anxious to lend to them, as long as they qualify and they’re a good candidate to borrow — as long as they have good financial information and can show that what they’re selling has good value and can clearly demonstrate how much they need to borrow and why.” <<
How to reach: PNC Business Loans and Credit, (800) 762-5684 or www.pnc.com