Banks in South Florida continue to see an uptick in commercial loan applications for small businesses, middle market and multi-family housing projects around the tri-county area, as the Covid-19 pandemic barely slowed demand.
Among the most requested commercial loan applications are SPA – sales and purchases agreement – loans, “anything from buying a warehouse or actually financing a building for themselves,” said J.C. de Ona, Centennial Bank’s Southeast Division president.
“We’ve also seen a lot in the residential side, like multifamily projects, single-family home development, townhomes; anything from pre-sold smaller projects to very high-end luxury spec homes, which have been very active today because there is very little inventory and a lot of demand,” he said.
According to Senior Vice President and Head of Commercial Banking for Amerant Bank Matthew Bruno, there is an increase in pent-up demand for commercial loans from different industries. “We’re seeing a rebound from a lot of these clients in 2021,” he said, “and actually better this year than in 2019.”
Some of the loans for which Amerant Bank is seeing a steady growth in demand are capital lines of credit, financing for business equipment, and investment loans for commercial real estate. “Also, [there is] an increase in SBA — small business administration— loans, where the bank is very strong in,” said Mr. Bruno.
Nick Miceli, regional president of Florida for TD Bank, said 2021 was a strong year for small businesses funding.
“We’ve seen a very strong trend for new small business loans to existing customers and many new ones that first got their opportunity to work with us during their PPP program,” said Mr. Miceli, referring to the Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act the federal government rolled out last year to help small businesses maintain their workforce during the pandemic.
“The Florida market has never seemed to be as impacted by Covid-19 as much as other areas of the country,” said Mr. Miceli, “and also seems to have recovered faster than many of those. The stimulus money put into the system and the PPP loans have certainly helped maintain a strong economic growth, and we’re seeing even the tourism industry come back, as Florida continues to be an attractive destination.”
But for PNC Bank’s Regional President for South Florida Cressman Bronson, the pandemic painted a less positive outlook.
“We’re still seeing supply issues tied with the delta variant continuing to be a drag on the economy,” said Mr. Bronson. “We’re concerned a little bit about the possibility of an increase of loan defaults in the commercial real estate sector, which involves hotel and retail office space, because of the pandemic.”
He said that the longer a large portion of our country’s workforce continues to work from home, the more permanent the shift from working in office becomes, reducing clients’ needs for commercial real estate and office space.
According to Bank of America’s 2021 Small Business Owner Report, only 39% of small business owners rate their business’s financial situation strong.
For banks like Centennial Bank, the financing of construction projects is continuing to move forward, said David Druey, its Florida Regional president, despite any Covid-19-related challenge.
“We never really saw a downturn even during covid,” said Mr. Druey. “We still saw housing values increase; we saw rental properties increased. We never saw a slowdown during the quote-unquote ‘slowdown’ that occurred across the nation.”
And with projects like Sweetwater’s Li’l Abner Apartments, a 244-unit, 250,992-square-foot affordable senor housing project that Centennial Bank is financing with project manager Raul Rodriguez, Mr. Druey said he is confident in the Miami market.
“We’ll continue to see Hialeah as a high growth area,” he said. “Wynwood is a hot place too. Anytime there are big companies coming to the county, like the tech companies, you’ll see a real, good cross section of exactly what you want to see, like service providers, white collar companies. It’s a ripple effect.”