JPMorgan Chase Steps Up Small Business Lending
Apr 27th, 2011 @ 11:47 AM by Amber Nelson
This should make some small business owners breathe easier. JPMorgan Chase announced yesterday its plans to increase 2011 funds for small business loans to $12 billion, a 20 percent increase from last year.
“Small business owners are not only our neighbors, but also the entrepreneurs that hire half of the employees in the United States. It’s critical that we support small businesses as they continue to fuel the economic recovery across the country,” said Michael Cleary, CEO of small business lending as quoted in a Portfolio.com article.
There is probably more behind this move than just a moral responsibility to support small businesses. Banks are in the business of making money, so the small business loan market must be looking more profitable these days.
“There’s some pent-up demand, they want to invest and the quality of the borrower is improving,” Cleary said in an interview yesterday referring to Chase’s motivation, as quoted in a Bloomberg piece.
JPMorgan Chase also acquired Washington Mutual Inc in 2008 and has inherited many of its small business customers in Florida and California. The company said it will be hiring 250 small business bankers this year to meet its needs and goals.
Small business lending dramatically contracted with many banks across the country a few years ago in the wake of the financial crisis. Lending standards jumped sky-high and many business owners were unable to find the capital they needed for their ventures.
The tides seem to be turning back though as other big banks have posted growth in small business lending as well. Bank of America has made $4 billion in small business loans already this year, and Well Fargo has done $3.7 billion worth of loans in the first quarter, a 27 percent increase from the same quarter of 2010. This should provide much needed relief to our nation’s small business owners, potentially even opening the doors for easing the unemployment rate.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.