TRUITT RQGERS
Now that the dust of 2021 has settled, experts are predicting that business loans will see significant growth in 2022. Why? Because business optimism is up.
“In Texas and elsewhere, the business outlook is positive,” said Mark Nurdin, Fort Worth market CEO for Bank of Texas. “Business owners are optimistic about this year. Restrictions have eased, and consumers are spending money. While rates are rising, we’re seeing businesses take advantage of interest rates while still relatively low.”
Financial institutions reported an uptick in loan origination in the fourth quarter of 2021 and by early February reported that loans were up by 4% over the previous year. Specifically, the industry saw commercial loan growth return in Q4.
While that may not sound like a lot, it represents a significant shift from the previous year.
Bill McCoy, a senior vice president of corporate banking for Bank of Texas, rationalizes the increase in demand for business loans. “There are a couple of reasons for this,” McCoy says, “There’s a lot of pent-up demand. Businesses are rebuilding their inventory and making strategic decisions based on our new normal.”
“There’s also an incredible demand for equipment; businesses need trucks and machinery for everything from home construction to facility expansion and renovation,” McCoy says, “Sure, the supply chain is still slowing things down on that front, but businesses are forging ahead.”
In fact, McCoy said the current rate environment may have business owners considering a loan for the first time or the first time in a while. And with the Federal Reserve signaling the potential for multiple rate increases, businesses are acting sooner than later.
If you’re a business owner considering your next growth opportunity, read below for expert advice on business loans from Fort Worth’s Bank of Texas.
- Talk to your banking partner. “Advice matters,” Nurdin says, “trust in the experts you have chosen and lean on their expertise. Every deal is different, so the best way to navigate the decision and the process is through a strong banking relationship.”
- Remember, not all debt is bad. “A lot of people are very debt-averse, but having no debt is usually not the best option,” McCoy says. “There are times when it is a useful investment tool. Sometimes saving capital or liquidity is worth incurring debt.”
- The bank and the banker make a difference. “It’s imperative to find the banker—and the banking relationship—that works for you,” Nurdin says. “Choosing someone that understands your business, your industry, and your priorities – is key.”
Texas companies are reporting significantly stronger job growth than the U.S. average across most industries. And with the state’s continued in-migration and business-friendly climate, the coming quarters promise more of the same.
“From clients to community, the outlook we’re hearing is positive,” Nurdin says, “Businesses are proud to be here.”
Learn more from Bank of Texas leaders about their 2022 outlook after analyzing industry trends and in-migration data.