With the public health picture still unclear and new President Joe Biden’s efforts to speed up delivery of COVID-19 vaccines as yet embryonic, many small firms are reluctant to expand.
COVID-19 vaccines have started landing in the arms of New Hampshire residents. But for now, businesses remain cautious about expansion plans for 2021, changing the characters of some banks’ commercial loan portfolios and increasing their share of real estate loans.
The Business & Industry Association’s most recent member survey, published in late fall 2020, found that 70 percent of the state’s businesses took a hit to their revenue thanks to COVID-19, with nearly 3 in 10 reporting between a 26 percent and 50 percent revenue loss. Twenty-two percent of respondents reduced staff as a result of the pandemic and of the 60 percent who said they had planned to add staff in 2020 before the pandemic hit, 59 percent said those plans were now on hold.
Those results echo a nationwide survey in December by the National Federation of Independent Businesses, which found that small business optimism had dropped, in part because of concerns about the new administration’s potential economic policies and the increased spread of COVID-19 causing renewed business closures.
The NFIB survey did find that 52 percent of business owners had reported capital outlays in the last six months, including expenditures on equipment, expanding facilities and purchasing land or buildings. And while 22 percent of owners planned capital outlays in the next few months, 60 percent of the small businesses surveyed were not looking for a loan.
Matthew Walsh, head of business banking for Chase Bank’s New England expansion, said his team has used the bank’s new locations as opportunities to reach out to local businesses and talk about Chase’s products, services and technology, winning interest from borrowers in the process. Chase began opening retail branches in New Hampshire two years ago and now has one in Nashua and another in Salem.
Even as business banking becomes increasingly digital, Walsh said, business owners like to know that they have access to branches.
“We’re definitely having the conversation,” Walsh said. “We’re definitely looking to acquire business and grow market share, so we’re proactively speaking with a lot of potential prospects.”
The local companies seeking loans from Chase last year included those that have adapted their operations to the pandemic – technology, life sciences and medical businesses – and companies that see a pathway to growth, Walsh said. Other lending has been for short-term capital needs and real estate.
He added that economic uncertainty is keeping some businesses on the sidelines.
“They don’t necessarily want to leverage the company without having a good idea of what the forecast looks like for their revenue, for the [profit and loss statement], for the balance sheet,” Walsh said. “So, there is some hesitation toward looking for funding.”
