The Coleman Report posits a life-threatening problem for small lenders: the approval of the Volcker Rule within Dodd-Frank means that large banks are going to be seeking new lending avenues – and a bunch are probable going to set their sights on SBA lending.
“Consider that 78% of all American bank deposits are held by only the largest 20 banks. The decks are already stacked against smaller banking companies with less than $500 million in assets. With a major source of revenue set to dry up in about 18 months, these larger banks will begin to scour the financial landscape for new places to deploy capital and SBA lending provides one of those opportunities,” says the Coleman article.
“Smaller institutions are going to have to be niche-focused and keep moving more quickly than large banks,” says Norris Lozano, CEO of BusinessUS, a non-bank lender making SBA 7(a) loans, “We will have to remain agile and ready to seize opportunities.”