FOR CREDIT NEEDS, SMALL BUSINESSES LOOK TO MAIN PROVIDERS FIRST

Wells Fargo and Bank of America top the list when it comes to being the main financial institution for small businesses, according to a recent survey by Phoenix Synergistics entitled, Opportunities in the Small Business Credit Market. Chase, Capital One, and PNC comprise a second tier of top mentions.  Rounding out the top ten named financial institutions are Citibank, SunTrust, U.S. Bank, BB&T, and TD Bank. These main providers enjoy important competitive advantages as small business lenders. Small businesses typically consider their checking account provider to be the main provider.

William H. McCracken, CEO of Phoenix Synergistics stated, “Small business lending has many more challenges today than before the recession.  The environment is extremely competitive with a host of new online lenders having appeared in recent years.  Our survey indicates that the main financial institution (FI) of a small business holds a strong position as a small business lender, being most widely used and preferred for credit services by small businesses.  The main small business FI should leverage its strong position and promote credit services to its small business customer base.  Wells Fargo and Bank of America – being the top institutions identified as the main financial institution among small businesses – are in a particularly advantageous position to capture the credit business of their small business customer base.”

These are among the findings from Phoenix Synergistics study, Opportunities in the Small Business Credit Market, featuring 800 internet interviews with owners and executives of small businesses with annual sales of $50K to $5M.  Industry categories included retail, wholesale, manufacturing, and services.  This study examines small business usage of various credit products and lenders, as well as their decision-making process and future demand. In addition, the channel usage and preferences of small businesses as related to credit are measured.