“Why should we bother with small businesses? Your own numbers say most banks lose money from small business loans.” – Retail bank head, Northeast

“We are much more interested in the middle market than small businesses. We can make larger loans at a similar cost base. We are avoiding small business lending.” –Retail bank head, Southeast

“We use SBA (Small Business Administration) poorly and probably lose money doing those loans. It is one of the reasons we do not succeed at small business.” – Senior marketing executive, West Coast bank

Nationwide, banks are continuing to struggle with whether to focus on the small business segment and how to manage those activities. Few retail banks are either honest or bold enough to admit they avoid small businesses, advertising that they love that segment while avoiding it to the furthest extent possible. The clichéd expression, “talking the talk but not walking the walk,” fits them perfectly. I’ve heard comments like, “There are too many opportunities elsewhere” and “We don’t want to dilute our banker’s focus from bigger loans.” That’s fair enough since it represents both an honest and, for those banks, a realistic and strategic view.