The Banking Brief: Lending is strong, but planning for tomorrow is paramount
For nearly a decade, the economy has been in growth mode, interest rates have benefited businesses and unemployment numbers remain at all-time lows. Zach Fee, president of regional banking for UMB Bank, talks about what this means for commercial lending and what we can expect in the months ahead.
Talent is tight. Money is flowing. And the economy continues to grow. Not surprising news to anyone out there. But the question that everyone keeps asking is, “How long can it last?” Spoiler alert: I don’t have the answer. What I can tell you is what we have experienced during this time as commercial lenders and how we have been helping thousands of business owners plan for what lies ahead.
Lending is Strong
At UMB Bank, our average commercial and industrial (C&I) loan balances increased 15.4% from $4.7 billion to $5.4 billion for the 12 months ending Sept. 30, 2019. U.S. wide, commercial and industrial loans have grown from $2.2 trillion to $2.3 trillion during the same time, an increase of 5.9%, according to the latest numbers from The Federal Reserve.
In short, this loan growth means businesses are investing in capital expenditures, expanding their real estate footprint and hiring talent. And it’s happening across various industries. Sectors such as commercial real estate, manufacturing, construction, energy, healthcare and technology are a few of the strongest-growing industries in the U.S. The growth in the overall economy is mirrored by the client activity we have seen here at UMB.
Planning is Vital
The past 10 years have witnessed an influx of mergers and acquisitions, excess cash flow and business growth unlike anything we’ve seen before. But as we all know, history has a habit of repeating itself. Does this mean we are up against a looming recession? Not necessarily. But if history has taught us anything, it’s that we need to be financially, emotionally and mentally prepared for what comes next – both personally and professionally.
For us, this means working with clients to ensure they are financially stable for the foreseeable future. We are sitting down with clients to review balance sheets, optimize cash flow and payment options, manage their personal finances with our private wealth management group, and ensure their business is ready for the next generation of leadership, whether that be within their own family or through an outside buyer.
Planning takes time. It takes work. And it takes dedication. The future is bright, but the preparation is tedious. I encourage every business owner to sit down with your lender and get ready for the next stage of your business’s growth. It will pay dividends in the years to come.
I also invite you to read some recent articles featuring our experts at UMB and learn more about our commercial lending perspective as well as some exciting growth we’ve seen during the past year.
- Area bank deposit growth hits second-highest rate in 10 years, Kansas City Business Journal
- Today’s M&A landscape: How banks can advise, ColoradoBiz Magazine
- DCEO’s Banking Roundtable, D Magazine
- Why people should not get too worked up about recession fears, cnn.com
- New UMB private wealth exec brings decades of Waddell & Reed experience, Kansas City Business Journal
- 4 tips to successfully manage and maximize excess liquidity, AZ Big Media
- Kemper: How UMB topped $1B in annual revenue for the first time, Kansas City Business Journal
- KC bank is one of Visa’s fastest-growing card partners, Kansas City Business Journal
- Are you running your payables or are they running you?, Fort Worth Business Press
- In just four years, UMB becomes a commercial real estate player, Kansas City Business Journal
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