New Report Examines How Banks Can Capture Business of Newly Optimistic Companies

U.S. banks are seeing positive signs among small businesses and mid-sized companies based on the demand for credit and other banking products according to a new report, Increasingly Optimistic Business Owners Seek Growth Partners, released today from Greenwich Associates

Greenwich Associates regularly tracks the economic sentiment of small businesses and mid-sized companies on the Greenwich Optimism Index. For the better part of the last five years, the Index has fluctuated from positive to negative as the U.S. economic recovery continued. At the end of 2013, collective sentiment started on an upward trajectory that has remained in placed ever since but by March 2015, outlooks have reached positive territory.

“Companies today are increasingly upbeat about the economy and this provides a positive signal for the business environment generally, and for demand for bank credit and other products specifically,” says Greenwich Associates consultant Dana Schwaeber. “For example, 35% of mid-sized companies and 1 in 5 small businesses say they are likely to consider a merger or acquisition in the next 12 months.”

Wanted: Industry Knowledge and Proactive Ideas
While strong levels of M&A demand are an obvious boon to banks, a sizable number of small businesses and mid-size companies say they are unlikely to turn to their current bank for advice on these transactions.

Although companies give a variety of additional reasons for bypassing their existing banks, business owners and executives cite one theme consistently: Newly optimistic company owners and executives are looking for more than attractively priced credit to help them grow their businesses.

To win the loyalty of these customers and differentiate themselves from competitors, banks must demonstrate the industry expertise and knowledge of companies’ individual business situations that are required to help companies achieve growth.

“It’s not enough to call once a quarter with a product to sell,” says Dana Schwaeber. “To stand out today, banks need to be proactively reaching out to companies with a full understanding of their businesses and concrete suggestions for how small businesses and mid-sized companies can achieve growth.”

The findings reviewed in Increasingly Optimistic Business Owners Seek Growth Partners are based on the ongoing Greenwich Market Pulse research series addressing the most important and timely issues facing U.S. small businesses and mid-sized companies. The current studies were conducted in Q1 2015 with participation from 226 companies interviewed in February and March 2015 representing 109 small businesses and 117 mid-sized companies.