The year ahead is shaping up as an exciting one for business. Rising employment, a more robust economy, and the prospects of deregulation and increased infrastructure spending have many eagerly anticipating economic growth. These developments and others cannot help but alter the commercial lending landscape for 2017.
Whether it’s competitive forces, technology or legislation, there’s no telling just what trends will most impact commercial loans over the next 12 months. But many observers are betting on these developments proving particularly pivotal for loan seekers.
- Greater efficiencies through technology. The rise of online lending isn’t the only tech story impacting commercial loans. In 2017, technological advancements in loan initiation, risk assessment and management will be integrated, resulting in more streamlined application and approvals for business customers. Ability to pull data from formerly disparate banking systems should help enhance banks’ global risk assessment on commercial loans.
- Deregulation may spur greater lending. The new president has made no secret of his desire for deregulation. Greater regulation tends to inhibit lending, so deregulation – particularly rollback of Dodd-Frank provisions -- may result in increased commercial loan activity ahead. Reduction in regulatory costs could particularly benefit community banks – and their customers.
- Rising interest rates. All signs herald a rising interest-rate environment, which can have an array of effects on commercial lending. Higher interest rates often mean a more robust economy, which tends to benefit the real estate market. But it could also make borrowers and banks more risk averse.
Many surprises likely await us in 2017. That’s all the more reason to stay in close touch with your commercial banker in the months ahead.
What commercial loan trends do you foresee for 2017?