Calgary — ATB Financial’s book of loans to small and medium-sized businesses (SMEs) in Alberta tells a story of optimism not always easy to read in the accounts of job losses, falling oil, and a lower dollar these days.
“We are not saying that we should all somehow ignore the challenging news out there, because it is quite real, and it does have a real human cost,” said Wellington Holbrook, ATB’s Executive Vice-President, Business & Agriculture.
“But we are saying that there is room for hope, and a sense that the women and men who run small and medium sized businesses in our province are facing that challenge head on.”
Holbrook pointed to new numbers that reveal ATB’s significant activity in the marketplace.
In the third quarter of the current fiscal year, ATB authorized 5,472 loans to small and medium-sized businesses. That is a jump of almost 30 per cent compared to the same number in the same quarter of the previous year, when 4,222 loans were approved.
Year to date, ATB loan volumes and values are keeping pace with the rate experienced in the nine months a year ago.
“That might sound like nothing has changed, but, look closer,” Holbrook said. “We are coming off a record year in terms of our support for small and medium-sized business, so, to keep up with that is remarkable. And worth telling people about.”
For the nine months that ended December 31, 2014, ATB bankers authorized 12,692 loans for a dollar value of $2.79 billion. For the same period that ended December 31, 2015, those numbers are virtually identical: 12,629 loans for a dollar value of $2.79 billion.
“We have not changed our standards in assessing the risks involved,” Holbrook said. “We do our due diligence. We are bankers, after all.”
Holbrook said ATB continues to see strong performance with its small and medium sized business loan portfolio, particularly when compared to the challenges facing Alberta’s larger businesses, especially those directly involved in oil and gas.
He also stressed ATB’s loan activity should be seen as more than simply money owed to the bank.
“A loan doesn’t just sit there,” Holbrook said. “That money does stuff, it creates activity, whether in people or jobs or equipment.”
Holbrook also pointed to two other significant facts in the unfolding ATB loan story:
- In the first 9 months of this fiscal year, ATB completed more Canada Small Business Loans Act loans than any other financial institution in Alberta, and
- More than 95 per cent of ATB loans to small and medium-sized businesses are provided to companies not directly involved in oil and gas.
All this news from the ATB loans front comes as the latest ATB Business Beat, conducted from November 2 to 13, 2015, found 72 per cent of the Alberta companies surveyed that have borrowed money during the last three years, whether they are ATB customers or not, received all or even more of the money requested. Unfortunately, almost a quarter of businesses surveyed (23%) didn’t get all the financing they needed, which raises the question as to how financial institutions can do even more to help entrepreneurs achieve their goals.
The survey also found that 60 per cent of respondents said their borrowing needs remained unchanged during the last year, while 22 per cent said their needs are greater than the previous year.
“Whatever your opinion or your unique circumstance, it is important to talk to a professional and have a good understanding of what additional funds could be used for, how payments would fit within your overall cash flow requirements, and how debt financing might be used to your advantage,” said Holbrook.
Read the whole Business Beat, including the latest ATB Business and ATB Economy indexes here.