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166 days

Some Lenders Benefit From SBA’s Troubled Loan Program - Barron's

1. SBA defaults are increasing, affecting small businesses and lenders. 2. Huntington Bancshares is a leading SBA lender, with $10 billion in loans. 3. Delinquencies in the SBA program have significantly risen in recent years. 4. The SBA program's cash flow turned negative after fee eliminations and relaxed rules. 5. Rising defaults could prompt the SBA to tighten lending regulations again.

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FAQ

Why Neutral?

While HBAN is a major SBA lender, rising defaults and cash flow issues could harm future profits, similar to past crises where lender stability was threatened by poor loan performance.

How important is it?

Despite HBAN’s position as a top SBA lender, increased defaults threaten profitability, impacting stock attractiveness in the short term.

Why Short Term?

Expected charge-offs from the current economic climate may affect HBAN’s short-term loan performance, characteristic of previous downturns affecting SBA-backed lending.

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