Blog FinTech

Commercial Lending Trends 2023: Navigating the Evolving Landscape

Commercial Lending Trends 2023: Navigating the Evolving Landscape

Business loans are a vital part of a healthy economy. Entrepreneurs, startups, and established companies alike seek financing for a variety of reasons — expansion, growth, debt consolation, new equipment, etc. — supporting the wider economic system and delivering products and services to the market. 

In 2022, the commercial loan market in the US was estimated at $2.7 trillion and looks to be on a growth trajectory for the 2023 year. However, just because demand is growing, doesn’t mean market need isn’t changing. For financial providers, keeping ahead of the commercial lending trends allows you to deliver a client-first service and get the best results long term. 

Latest statistics driving the business lending trends this year

Before we dive into the latest commercial lending trends in technology and more this year, let’s get to grips with some of the statistics that are informing these changes:

  • $8,823.52 billion — the value of the commercial lending market in 2020
  • $29,379.83 billion – the value of the commercial lending market by 2030
  • Market growth at an estimated CAGR of 13.1% within the next ten years
  • Small businesses often seek out loans to improve their growth — 43% in 2019, 37% in 2020
  • Top reasons to apply for a business loan include business expansion (42.4%), equipment purchase (29.4%), and marketing and advertising (28.6%).
the commercial lending market growth from 2020 to 2030

What’s driving the commercial lending trends in 2023 and beyond?

Ever since the beginning of the pandemic, the loan market has been shifting in somewhat unexpected ways. Although, as a whole, interest in small business credit is rising and averages at approximately $663,000 per business on average (FED), there has been some ups-and-downs in the amount of credit applied for through traditional firms. 

Conversely, interest in alternative forms of lending seems to be rising. Modern banking technology and P2P (Peer to Peer) lending platforms are on the rise, with P2P being valued at an estimated $82,300 million in 2021 with a CAGR 29.1% giving a $804,200 million by 2030 estimate.

Of course, it’s not just numbers driving the trends, geopolitical movements, sociological changes, and technology advancements are intensely impacting how commercial lending is moving. 

  • Geopolitical changes — as people move more frequently, the need for globalised services is growing, this also applies to business loans. In addition, greater regulatory requirements and more adoptions are required to account for a more challenging KYC/AML landscape. 
  • Sociological changes — business owners, irrelevant of business size, are now seeking smarter ways to fund their businesses. Gone are the days of traditional bank loans and in its place are smart lending systems and peer to peer platforms. In addition, many companies are also seeking more ethical services that may not suit the current market. 
  • Changes to small business operations—with small businesses accounting for 99.9% of all businesses in the US, they make up a market majority—and that majority needs credit. The challenge is that 59% of these small businesses are experiencing financial difficulty, rated poor to fair the FED’s small business credit survey. Among some of the factors, this means that the credit systems they are using are no longer working for them.
  • Technological advancements — in the last few years, we’ve observed a massive boost in the use of AI and machine learning technologies in the banking sector. These are currently driving and will continue to do so, updates in the market and the solutions created.

These are not the only factors that are impacting market trends but stand as some of the most prominent examples. Depending on your region, you may experience micro and macro influences or variations of these factors. 

most common reasons for applying for a business loan

Top 7 commercial lending trends to watch out for

So much is changing in the world of finance and lending, following these top 7 credit trends in commercial lendingwill help you keep your business on track.

Diversified options for lenders and borrowers

How SME Lenders Can Tackle ‘Invisible Borrowers’ with Alternative Data In the past, the loan process was simple—go to the bank (most likely local) and make an application. Those days are gone. Not only is there a reduction of local branches, but services have moved online. However, digital loan processes are only step one. In addition, new forms of lending and business support have arrived, including P2P lending, DAOs, and other alternative lending platforms. 

AI innovations

Undoubtably, AI has impacted almost every industry in 2022/23 to some degree or another. Although such advancements may still be in their early stages of refinement, they are still revolutionizing the industry and will do so for years in the future. When it comes to credit trends in commercial lending, AI-usage is no exception and is being onboarded at rapid pace by fintechs and traditional structures alike. 

Do you believe AI will transform SME lending?

Sure, totally
Less likely
readers voted


This is not the first year that hyper-personalized services have reached the top of our list. As we move further into 2023, we can see that financial providers are striving to deliver services that match the needs of their clients—whether this is personalized in-app content to tailored loans and interest rates and more. Considering the new tools available, such as Big Data and AI analytics, this commercial lending trend isn’t showing signs of changing in the near future.

Embedded experiences

How to Choose Affordable SME Lending Software Popular in the retail lending world, embedded experiences are making their way into the business world as well. Companies will soon start to find embedded, smart lending experiences across the apps and programs they use, including financial management software. This will help them to better manage their businesses and calculate results in real time.

where are small business owners applying for loan


Alongside the drive for technology and advancement, cybersecurity will play a major part in the commercial lending trends of the coming year. For companies developing SME lending software, it’s vital to assess that adequate security measures have been taken and these are efficiently relayed to users to ensure their and their businesses’ ultimate security at the end point. As cyber criminals continue to user more devious means to infiltrate or defraud businesses, companies should take extra care in this area. 

Regulatory advancements

With the advent of cryptocurrencies and advancements of digital banking, regulatory measures are a hot discussion at the moment. As the regulators battle out the next generation of laws for finance, companies operating in the arena need to ensure they are aware of upcoming and already implemented changes. To do so, many are employing smart technology that keeps watch on changes and help developers update platforms based on the latest regulatory updates. 

Evolving business requirements

How to Develop Commercial Loan Software Alongside the advancement in technology, business requirements are also changing. Clients are demanding new ways to manage their credit, whether this be through smart dashboards or more flexible payment options, and companies are seeking new ways to manage the credit process from A to Z. Technology is supporting in this role, but only when it’s used right. Intelligent modules can analyze credit risk, calculate repayment terms, flag bad loans, and help companies take action before a problem is critical. The challenge companies face when investing in this trend is knowing specifically how to make it most efficient for their service and to integrate it seamlessly alongside any legacy software or tools.

Wrapping up credit trends in commercial lending

As financial organizations adjust their plans for 2023 and start their strategy for the 2024 year, it can be all too easy to take an adopt to survive pathway. Instead, we recommend taking a moment and following the mood of the market — a back-to-basics approach. 

HES LoanBox Business Solution for Commercial Lending Currently, clients are interested in a seamless, efficient platform that lets them get things done efficiently — not just bells and whistles. By engaging the right, smart technology, such as AI software, machine learning tools, and integratable software, you can reinvigorate your current solutions or develop a new one from scratch to delight both clients and their customers alike. 

Need help getting started? Reach out to HES and we’ll walk you through all you need to stop jumping on the bandwagon and start being an industry leader. 

3 Let’s be friends on Twitter