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Quarterly commercial lending outlook

The Banking Brief: Lending is strong, but planning for tomorrow is paramount
by Zach Fee December 17, 2019
Business

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.

Read more

Interested in learning more about UMB’s commercial banking solutions? Check out our Commercial Resource Center.graphic line break

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

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Zach Fee

Zachary (Zach) Fee joined UMB in 2002 and currently serves as president of treasury management and commercial banking verticals.

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