No New Banks Launched Since 2009
Historically, the regular creation of new banks stalls during a recession, but rebounds during a recovery. However, no new banks have been formed in North Carolina since 2009, according to the state Office of the Commissioner of Banks. That compares to the 28 formed in the five-year period ending in 2008. State Commissioner of Banks Ray Grace said, “Unlike previous economic downturns, we have not seen a resurgent interest on the part of investors or other groups to start new banks on the upside.” The situation in North Carolina mirrors a national trend, as only one new bank was formed in 2013. A tightening of regulations in the wake of the recession has made banking less attractive to investors, as have the poor returns notched in the last decade.
What This Means For Small Business:Small business owners are heavily reliant on local banks for loans they need to grow their enterprises. With fewer local banks, there are fewer ways to get that needed capital. This is of particular concern as other sources of capital have dried up in the wake of the financial crisis in 2008.
Further Reading:The Raleigh (NC) News & Observer runs a story on the subject. Do you own a business in Raleigh? Become an NFIB member today and join 350,000 other entrepreneurs who are saving time and money through their membership..
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