Credit

Credit is tightening to 2008 levels at a time when small businesses need help the most, former SBA chief Karen Gordon Mills says.

The effort is the first offshoot of Project REACh, which is designed to bring together business leaders, government officials and advocates to help improve financial services options for disadvantaged communities.

The New Jersey company reported a quarterly loss after becoming one of the first lenders to liquidate loans harmed by the coronavirus pandemic.

Lenders pushed back against the notion that city dwellers' pandemic-driven flight to suburbia would hurt them. They say fewer landlords have sought deferrals as vacancy rates remain low and rent collections have stabilized.

The subprime lender cited low odds that Washington will deliver further economic relief, and the fact that $1.5 billion of loans whose deferral period expired are now more than 30 days behind.

The company's Silicon Valley Bank unit reduced its loan-loss cushion by $52 million. Private-equity and VC clients have warmed to the practice of doing deals virtually, which increases lending opportunities, SVB executives said.

The Democratic nominee has not gone as far as some progressives in support of financial inclusion, but ideas such as postal banking, a government-run credit reporting system and universal bank accounts would likely gain traction under a Biden administration.

The Cincinnati company, one of just a handful of lenders to reduce its cushion against bad credits in the third quarter, was grilled by analysts who suggested it was being too optimistic about the long-term effects of the pandemic recession.

Banks have managed to steer around trouble spots in energy, hotel and mall-related credits. But fears of further deterioration, an eviction wave or more job losses are keeping lenders circumspect.

Weak loan demand, persistently low yields and the continued struggles of sectors such as hospitality and retail are among the myriad lending challenges facing small regional banks.