B2B Payments

The Light And Dark Of Business Finance


It’s a new year, economic recovery is progressing and the global economy is headed for some changes. But business finance isn’t such a rosy picture everywhere you look. In the U.S., corporate travel spend and big bank lending to small businesses is on the up; in the U.K., however, optimism among SMEs is dropping.

Check out the latest statistics on these topics, along with payroll penalties, asset-based lending volumes and SME banking performance, all of which are in flux.


299.9 Billion: The value, in U.S. dollars, that the nation’s corporate travelers are expected to spend this year, according to the latest numbers from the Global Business Travel Association (GBTA). That number is expected to spike to $310.4 billion in 2017, meaning that U.S. corporate travelers provide, in the words of GBTA Executive Director and COO Michael W. McCormick, “an island of stability in a sea of global volatility.”

“Over the next two years, U.S. business travel spending will grow at just above 3 percent, but this is largely driven by price, not transaction-level increases,” He continued. “In this environment of modest transaction growth, low inflation levels and global uncertainty, we can expect continued consolidation in the business travel industry.”


845: The average penalty, in dollars, that 40 percent of small business owners calculating and remitting payroll taxes on their own are charged by the IRS, according to statistics released by Heartland Payment Systems last week. The penalties are indicative of the struggles small businesses owners face come tax season; one-third of small business owners have reportedly been penalized for payroll errors, the company added.


36: The percentage of U.K. SMEs surveyed by Bibby Financial Services (BFS) that said they expect to grow in the first quarter of 2016, the company announced last week. Three months ago, that figure hit 46.4 percent. According to researchers, that drop in optimism can be attributed to late payments, growing competition and a lack of demand in the nation for business, reports said.

“SME confidence is plummeting, while investment is only being made if it is essential,” stated BFS Chief Executive David Postings. “Concerns over the uncertain U.K. economic environment are strengthening, suggesting that SMEs believe the recovery is losing steam.”


22.9: The percentage by which big banks in the U.S. increased their lending approval rates to small businesses, according to new data from Biz2Credit. The firm’s December Small Business Lending Index detailed improvements in SME lending approvals among smaller banks and institutional lenders, too, compared with Nov. 2015 levels. But the increases weren’t seen across the board; according to the report, alternative lenders’ SME approval rates remained unchanged between November and December, stuck at 60.7 percent — the lowest level since Aug. 2011, reports said.

According to Biz2Credit CEO Rohit Arora, the figures are indicative of an improving economy and the continuing competition banks impose on alternative finance players.

“The big banks have maintained their aggressive approach to lending to small businesses, and with the adoption of the Federal Reserve’s interest rate hike, I expect they will be even hungrier to grant loan requests,” Arora said in a statement, adding that big banks have also increased their adoption of new technologies to streamline the loan application review and approval process.


10: The percentage of small businesses surveyed that said they would consider switching banks in the next six months, a figure that analysts at the Federation of Small Businesses and the British Chambers of Commerce (BCC) said represent the struggle for SMEs to have a positive banking experience. According to the research, the highest-rated small business banks were challenger banks — smaller institutions established to compete with the U.K.’s Big Four banks. Sweden’s Handelsbanken and HSBC-owned First Direct landed at the top of the list when small businesses were asked to rank their banks. Researchers also found that SMEs were more likely to recommend their banks to their peers this year than they were last year, albeit only “marginally,” according to BCC Head of Policy and External Affairs Adam Marshall.


7: The percentage that asset-based lending commitments rose in Q3 2015 compared to the same period in 2014, according to a recent report from the Commercial Finance Association (CFA). The group publishes a quarterly report on the levels of this type of lending — asset-based loans, factoring, supply chain finance and the like — and in Q3, while the industry saw only a modest increase, CFA Chief Executive Officer Robert Trojan dubbed the market “steady.” New commitments of asset-based loans dropped by 11.3 percent compared to Q2, the report added.


The data offers a positive picture in the U.S. Business travel spend is on the rise, even while the global travel market struggles. Big bank lending is on the rise, too, amid a more optimistic economic outlook, with asset-based lending also seeing some modest gains. But it’s not all flowers and sunshine: In the U.K., small businesses are pessimistic and are getting frustrated with their banking experiences. There’s a light and dark side to everything, especially when it comes to business finance.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.