The Unloaned: Why Some SMBs Don’t Borrow and What Can Be Done About It

Aite Group’s estimates the SMB lending market to be at US$500 billion in commitments, but since 35% of SMBs don’t seek credit, there is potential for the market to be much larger.

Boston, April 27, 2017 — The market for lending to small and midsize businesses in America is one of the most attractive ways for banks to deploy their capital. According to the latest Aite Group report, The Unloaned: Why Some SMBs Don’t Borrow and What Can Be Done About It, unloanded SMBs are an import yet often overlooked segment in this market. The unloanded SMB market segment reduces the overall market’s size, and Aite Group believes that if the businesses within it were convinced to borrow, it would significantly increase opportunities for lenders.

“Although SMBs that don’t borrow dampen credit demand, a persona that characterizes the typical unloaned SMB is now available to lenders,” says Aite Group senior analyst David O’Connell. “This persona can be used to hone the analytics, customer relationship management systems, talk tracks, marketing efforts, and lead generation activities of lending lines of business that seek to grow their outstanding,” he says.

Aite Group has undertaken an examination of the unloaded population of SMBs, and among the characteristics of unloaded SMBs explored are why these small businesses don’t borrow and how they differ from their peers that do borrow. This report also gives insight into the profile of the typical unloaned SMB: This is what bankers should know when seeking to better understand this market and how they might expand into it.  

 

About Aite Group:
Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger. Visit us on the web and connect with us on Twitter and LinkedIn.

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