Popular’s small business loan activity at $280M in ’14
Banco Popular officials said Tuesday commercial lending activity for Puerto Rico’s small and mid-sized business segment reached $280 million in 2014, a 25 percent year-over-year increase that shows “an encouraging picture.”
Elí Sepúlveda, executive vice president of commercial credit at Banco Popular, said the “results fill us with great satisfaction and enthusiasm and give us a bit of hope that things are improving in that segment.”
In 2014, Banco Popular completed 1,600 transactions with small- and mid-sized businesses, with the average transaction up by 20 percent, he said.
“The average transaction was for $50,000 in this market that is showing a lot of activity,” Sepúlveda said. “The percentage rate of application approvals hovered at about 73 percent in 2014, versus 54 percent in 2013. We’re seeing more transactions and better credit quality.”
In terms of non-performing loans, the banking executive said the rate dropped by 30 percent last year, while deposits showed an uptick. Additionally, SBA guaranteed loans increased by 26 percent, there were more commercial services offered and total deposits grew by 6 percent.
“These figures demonstrate that the business sector in Puerto Rico is an active one and we at Popular have a strong commitment to help them in their development process,” said Sepúlveda.
One of the reasons he gave for the positive numbers is that business owners are coming in more prepared and Popular has taken the task of providing the tools and guidance to help these customers feel more confident when starting the process of starting a business or expanding or improving existing ones.
“We’ve worked on a number of initiatives, ranging from fostering partnerships among our commercial clients to guiding them in areas such as fraud prevention, money management and business plan development,” said Sepúlveda.
One area that reflected a reduction, but with a positive impact, is the decrease by 27 percent in the average time it takes to close a commercial loan.
“We established an integrated center for the approval and closing of commercial loans that helped us improve processes and become more agile in that direction,” said Vivien Montañez, senior vice president of Popular business banking. “In addition, the technological tools that business customers are offered have been instrumental in helping them manage their businesses.”
She said the number of products afforded to the segment increased by 46 percent last year, particularly tools for completing payroll and deposits online rather than at a bank branch.
For the meeting with members of the media, Popular invited several small business executives representing various industries ranging from restaurants to tourism that successfully navigated through the rough economic waters of the past decade to push their ventures forward.
Alex Colón, who represented his family business, Green Pack of Puerto Rico Inc., credited the bank for supporting the company’s expansions over the years, and most recently, its export plans.
“We’re starting to export to the U.S. mainland, specifically Florida and New York, for which we’re currently in negotiations,” said Colón, who along with executives from El Mesón de Melquiades, Ramey Medical Group, Pure Adventure and La Finca Products will be featured in Popular’s new advertising campaign for commercial banking.
“To get through these development phases during such competitive and challenging economic times, you need the support of someone who trusts in what you’re doing,” he said. “Popular has done that, but it has been up to us to do things right and be consistent in the products we offer.”
Mariel Arraiza, senior vice president of marketing and business intelligence, said Tuesday the new advertising push will kick off Thursday on digital and print media, with a budget of $600,000 and will run through summer.
“Our customers are examples of ‘Echar Pa’lante’ (“Moving Forward”) and they validate our commitment to the economic development of Puerto Rico. Through this campaign, we want to reinforce the message that we continue to see economic activity towards entrepreneurship, innovation and good management of finances,” said Arraiza.