Latest comments for http://www.ababj.com , comment 0 to 1 out of 1 comments http://www.ababj.com Tue, 21 May 2013 16:45:42 +0100 FeedCreator 1.7.2 http://www.ababj.com/myblog/dangers-of-black-box-thinking-in-small-business-credit-1980.html#pc_912 Commercial banks are running away from micro-business lending. As you note these services are being delivered through the branch network and the automation is driven by cost reduction. When default rates on this FICO and signature based branch product spiked- many banks exited the market. Here in LA First Republic, Union Bank and B of A all dropped their sig and FICO $200K loan products immediately. I think the opportunity exists to lend into this markets with asset security. Banks should consider building robust product driven niches like equipment leasing, receivables lending, merchant card advances. These products can be modeled and underwritten in a more automated fashion and allow the lender to earn higher yield for his risk. Most of these banks are struggling with their risk-adjusted returns, and community banks aren't experts in these products. An FI that understands this market will face a tidal wave of demand from commercial clients whose bank funding has dried up. - Steve Mon, 06 Jun 2011 14:13:46 +0100