It’s Time for Lenders to Step Up and Support the Small Business Community

Few businesses, large or small, are immune to the financial impact of the pandemic. Even before the pandemic-driven recession, conditions were difficult for small and lower middle-market businesses as there were already signs of weaknesses in the market. Small companies found it harder to secure capital than larger companies. Today, the struggles for Main Street are real. They need working capital. They need liquidity. And they need access to banks and lenders that understand the market, their needs and their businesses beyond just a simple view of how much money they are making historically from lending to them. 

Access to capital has slowly been getting harder for small businesses. The number of financial services companies serving SMBs has declined significantly. Many community banks—formerly accessible options for small business credit—have closed their doors. There are 11,000 fewer community banks than there were 30 years ago. The number of Fintechs and smaller lenders focused on small businesses has also reduced. 

Since March 2020, difficulty accessing credit has exacerbated. Access to capital for small- and mid-market businesses has become harder to come by. Small business loan approval rates from large banks were down 50 percent year-over-year in November 2020, with large banks approving just 13.2 percent of applications they receive from small businesses. Smaller banks approved just 18 percent of business financing applications, compared with 50 percent in November of the previous year: these types of loans are just not profitable for larger banks. 


At Pitney Bowes, we have a century-strong legacy of supporting small- and mid-market businesses. We’re seeing SMBs coming to us having been let down by their lenders, pushed out by banks or dissatisfied with changing terms beyond their control. Others are capped with their existing lenders and need to diversify in order to get the funding they need. Many of these businesses are sound, with strong underpinnings, but this lack of access to capital has made them uncertain about their future. Additionally, lengthy processes and complex paperwork are barriers to accessible financing. 

America’s 30 million small businesses are fundamental to our economy. They generate approximately 44 percent of our economic activity and employ around 58.9 million people. It is our duty, and the duty of all lenders, to come together and resolve to support this market as they so deserve.