8 Can’t-Miss Small Business Predictions for 2021 from the FE Exec Team


January 22, 2021

Every new year tends to bring in excitement for a fresh start and commitments to self-improvement. At the same time,  it can also introduce a level of fear and uncertainty — whether you’re a small business owner or a lending professional.

No need to consult a crystal ball or your horoscope. A group of small business insiders – the executive team at leading lender FE Small Business Finance – is here to help with predictions for 2021.

Here are eight key trends to focus on to maximize your year for your business, vendors and customers.

Tax reform

The biggest thing we’re going to see in 2021 is tax reform and its impacts. It will move capital into the hands of more small businesses.The question is, what will they do with it? Will they use it to expand and hire more employees? That could be good for small business lending. Or will they use it to pay down and deleverage? Already, we saw a freeze, a hesitation, as a lot of people pulled back (from the market) at the end of 2021, not knowing what the tax bill would do. – Kurt Chilcott, CEO and president

Mike Owen oversees all sales at the company.Commercial real estate lending

In 2021, I’m seeing smaller loan-unit production but higher-dollar concentration. I predict nominal 10% growth in dollars loaned or lent. Average dollar size of projects has gone up due to lack of inventory, which will likely lead to higher pricing per project on commercial real estate deals. I also expect construction and the cost to rehab to follow trend in turn will be more expensive. – Mike Owen, chief credit officer and director of business development

Digital financial tools

There’s a growing emergence of software moving into the financial space trying to make lending easier, whether it’s online applications or new ways to evaluate a borrower’s creditworthiness. I predict the rate of creating these apps is outpacing the rate of adoption. Small businesses are still reluctant to give full access of their finances to the cloud. There’s a general hesitance, regardless of age. But I am seeing interest in finding better ways to transfer and share documents safely. – Kim Buttemer, chief operating officer

Capital for underserved communities

The Trump administration is proposing an overhaul of the Community Reinvestment Act (CRA), which will likely mean an increase in bank deregulation. If CRA regulations are loosened, the result will be banks reducing their commitments to communities of color and low-income neighborhoods.  – Robert Villareal, senior vice president of community development

 Loan rates

I expect incremental rate increases in 2021.  As rates rise, borrowers will shift from payment sensitivity to more rate sensitivity.  As the dynamic changes, we may see forced transparency with online lenders, which will ultimately be good for consumers. I also see more banks entering partnerships with fintech (financial technology) companies, resulting in more access to capital for more small businesses and lower costs overall. – Catherine Riddle, chief financial officer and technology officer

Financial partnerships

Coming to my mind is the word co-creation. With the different players in the market, there are different perspectives and incentives influencing how to support small businesses. 2021 will have more products and services that come to market incorporating and leveraging group intelligence. – Allison Kelly, senior vice president of strategy and innovation

Content strategy

Voice search will continue to be big in marketing and will affect how we write content. It won’t be based on how people type but how they speak. Everyday natural speech is different from how you write, so it’s important to be conversational in your writing. – Penina Goodman, senior vice president of brand marketing


HR policies

As we’ve seen on every news station for weeks now, harassment and retaliation claims are in the forefront of every HR person’s mind, or should be. I predict that this will continue and even increase. One of the most common claims submitted to the Equal Employment Opportunity Commission (EEOC) is for retaliation after a claim of harassment is made. Make sure that your employee handbook has an up to date and comprehensive policy against harassment and retaliation. Include clear guidelines on what will take place if there is a claim and then follow them. – Erin Hebert, senior vice president of administration and human resources

From tax reform to access to capital, 2021 will bring new ideas and opportunities. As always FE Small Business Finance is on the pulse of changes affecting small business. We will continue to advocate and help those in lending and in small business advance.

Looking to launch a business in 2021? Or want to grow an existing venture? FE Small Business Finance offers several loan options. Tell our loan experts about your needs, and they’ll work to match you with a financing plan that best suits you.

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