Top Small Business Predictions for 2021


February 19, 2021

With 2021 behind us, it is time to look forward to new opportunities in business and in life in 2021. 

While the pandemic is not yet gone, there is optimism and hope for the year ahead. 

Our management team here at FE Small Business Finance has worked hard during the pandemic to support small businesses, and now they have taken an even harder look at what the landscape will look like in 2021. 

Whether you’re a small business owner, investor, or a lending professional, you will want to take a look at what our talented team of industry leaders has predicted for the coming year and how it will affect you.



CEO Kurt Chilcott small business expert

Kurt Chilcott, President & CEO

The length of the coronavirus pandemic will cause a longer period of relief programs for small businesses and mean that the recovery will stretch through 2021. Federal and state recovery programs will provide enhanced benefits in an attempt to stimulate new businesses and the revitalization of specific sectors hardest hit. 

The new administration has the opportunity to recalibrate programs designed to reach communities of color and to drive systemic change. Our alliance with Capital Impact Partners positions us to be at the cutting edge of this work.



Mike Owen Chief Credit Officer Director, small business expert

Mike Owen, Chief Credit Officer and Director of Business Development

The Coronavirus pandemic deeply impacted the decline in the 10-year Treasury yield and the Fed Rate, both of which have benefited the 504-loan program in 2021 with unprecedented lower fixed interest rates being issued. If you read predictions or ask any economist for their view of lending in 2021 most believe we still have several quarters of reduced activity ahead. Though interest rates are low, lenders are exercising caution making it harder for borrowers to secure loans. 

As I have indicated in prior years, the SBA 504loan program runs counter cyclical to most conventional CRE lending trends especially during times of economic uncertainty. Offering 504 loans has the ability to meet the lending demands during these times and also offers traditional CRE lenders another option to fulfill customers needs. 

As we look ahead to 2021, there is reason to be hopeful. While we still have several quarters of reduced business activity ahead, I predict interest rates will remain low, CRE inventory will remain stable, conventional lenders will continue to exercise lending risk caution, making it harder for borrowers and businesses to secure loans without considering an option such as the 504-program for commercial property acquisitions. 

Most Economists predict the U.S. GDP will be back to pre-COVID levels as soon as Q3 2021. If that’s the case, businesses can expect to see opportunities within the commercial real estate market in 2021 but they won’t last forever. 2021 appears to be that timeframe in history when sitting on the sidelines may leave a business or a lender with regret it missed a unique opportunity.



Shelli Hayman

Shelli Hayman, Senior Vice President, Production

Despite the challenges of 2021, being cautiously optimistic will be key for 2021! It will be a year that requires more grit than we have experienced in years past on a variety of fronts. 

The small business lending industry as a whole will need to take a hard look at traditional practices held.  It will be critical to look at what will be effective to move us forward with even greater impact by means of new and creative approaches to lending – especially within our underserved markets. 

The element of “art” in what we do as a lender will take on even greater meaning. The practice of “saving for a rainy day” has never been more essential as we move forward.



Robert Villarreal SVP of Community Development

Robert Villarreal, Executive Vice President, FE Small Business Finance, President, Bankers Small Business FE of California (CDFI)

Small businesses were devastated by the pandemic, particularly businesses owned by entrepreneurs of color. Some additional aid, beyond what has been deployed and approved, will continue to be needed. 

Under the Biden administration, there will be additional funds approved to support States and local governments. These will be more strategically implemented and have the ability to expand support of underserved small businesses.

Unfortunately, we will not see an uptick in economic activity until the third or fourth quarter of 2021. However, this uptick will be one that is more inclusive and will provide greater opportunities to communities of color, which will start the long work we have in front of us in bridging the racial wealth gap.



small business expert

Chuck Sinks, Director, Small Business Advising

So glad to see 2021 in the rear view mirror. Onto 2021 and what we can learn from how it affected the small business community! 

The pandemic highlighted the importance and value of e-commerce and virtual offerings.  Not only can these serve as an additional revenue stream but they will also diversify small businesses offerings which create a stronger foundation.  

People have new behaviors, they have adopted technology, virtual experience and e-shopping into their lives.  These new ways of life will stay with us into the future.  If businesses haven’t already, it is important to create or continue to establish your digital offerings to be able to compete in 2021 and beyond.

Focusing on digital offerings will serve small businesses well.  It is important to make it a priority and weave it into your business plan and budget.   



LaKisha Grant

LaKisha Gant, Vice President, 504 Loan Operations

I am optimistic that 2021 is going to be a stepping stone in the right direction for the American people. At minimum, 2021 must be better than the dumpster fire that is known as 2021. Our world changed and generations to come will remember and talk about the Coronavirus Pandemic. 

From fighting for tissue to fighting for social equality, we have made history. As the vaccine continues to be distributed and stay-at-home-orders are lifted we will get a glimpse at the possibility of returning to a form of normalcy, whatever that new normal is. 

I believe that the Biden-Harris Administration will restore respect and confidence and prosperity back to the American people. If we have learned anything from 2021, it is that life is short, and we need to stay aware and stay vigilant as there is no way to know what the road ahead may bring. 

My heart goes out to all the families and businesses that have been negatively impacted by the pandemic and in 2021, my hope is that we as Americans can repair and rebuild what has been broken.



Tony Barengo

Tony Barengo, Vice President, Credit

Opportunities will be plentiful in the second half of 2021. Once a vaccine is distributed and consumer confidence returns to the social aspects of everyday life, opportunities will arise. The tragic loss of so many businesses in 2021 coupled with a new stimulus bill will open doors for entrepreneurs. 

The key will be planning ahead and getting the access to the capital necessary to make the investment in the future. And SBA products are a great way to obtain low cost financing for small business owners.



Susan Lamping

Susan Lamping, Vice President, Sales

Our world turned upside down this past year. We were forced to pivot to function in a changing environment and have learned some valuable lessons through it all. We have yet to see what the new normal truly looks like, but one thing for certain is that some of the world’s new practices will likely be integrated into that new normal. 

With the world converting most everything to an online experience nearly overnight, consumers are becoming increasingly comfortable with the virtual platform. Small business lending is one of the many arenas where evidence of this phenomena abounds. 

As many lenders see online application volume increasing, we expect online high-rate lending volume to grow as well. It is critical at this time to ensure small business borrowers are getting the financing they need at reasonable rates and terms. 

Now, more than ever, CDFI (Certified Development Financial Institution) lending is essential in supporting our community through recovery and beyond. If we’ve learned anything through this, it’s that CDFI’s need to become a united front to put us on the map so that small businesses know where to go when traditional financing isn’t an option. 

I see growth in demand for CDFI lending from small business owners who are looking for affordable capital in 2021, and the more we can do online, the more our small business community will be able to access our services.


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