Credit issues put damper on profits at SBA specialist Newtek

Newtek, one of the nation’s largest lenders for small businesses, is seeing a significant spike in loan defaults and credit issues. This news is a warning sign for any retailer or service provider relying on small business health. The company recently doubled its money set aside for loan losses because more borrowers are struggling to keep up with payments. The CEO blamed the 'hangover' from high interest rates and persistent inflation for squeezing the cash flow of small operators. For merchants, this indicates that the lenders who fund your operations—or provide the capital your B2B customers use to buy from you—are tightening their belts. When a major player like Newtek reports a jump in 'non-performing' loans, it usually leads to stricter underwriting standards. This means it may become harder for your business to secure new lines of credit or for your commercial clients to get the financing they need to close deals with you. You should prepare for a landscape where capital is not only more expensive but harder to qualify for as lenders prioritize stability over growth.

Source: American Banker — Top News

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