What Higher Rates Haven’t Changed: The Role of Smart Credit – and Smarter Relationships
CHICAGO, July 17, 2025 (GLOBE NEWSWIRE) -- In a high-rate environment, business lending has become more selective, but not impossible. For banks and borrowers who focus on fundamentals, communication, and long- term planning, financing is still getting done. To help make sense of what’s changing (and what still works), we spoke with Brian R. Monson, Senior Vice President and Deputy Chief Credit Officer at First American Bank.
With more than two decades of experience in commercial credit and underwriting, Brian offers timely insights into borrower behavior, what banks are really looking for right now, and why strong relationships still make the biggest difference.
Q: How has the rise in interest rates changed the lending landscape?
Brian: When rates spiked, many business owners did what you’d expect: they paused and reassessed. Loan payments were suddenly much higher. Deals that made sense a year ago didn’t pencil out the same way. So, sponsors started bringing in more equity, valuations came down, and people got more cautious.
We saw a slowdown in loan demand across the board. Businesses crave certainty, and when that’s in short supply, they tend to wait.
Q: Are you still seeing strong lending activity in certain cases?
Brian: Absolutely. While the volume of deals has slowed, the fundamentals haven’t changed. We’re still making loans every day to companies that are well-managed, financially sound, and planning ahead. What’s different now is that credit decisions require more context. Numbers matter, but the story behind those numbers matters more.
Q: What kind of factors do you look at beyond the financials?
Brian: We take a holistic view. Are receivables being collected on time? Are vendors getting paid within terms? Is the business managing liquidity effectively? These are the kinds of operational details that tell us how a company is run. And in a tighter environment, they’re more important than ever.
Some sectors, like logistics, are under more pressure. It’s a capital-intensive industry, and with softer freight volumes and equipment devaluations, many operators are struggling. But being in a high-risk industry doesn’t automatically make a borrower risky. It just means we have to structure the deal the right way and really understand what’s going on behind the scenes.
Q: What kinds of financing does First American Bank typically provide?
Brian: We finance two things: capital goods and time gaps. That means if you’re buying long-term assets like equipment, or if you need working capital to bridge the gap between inventory purchases and customer payments – we can help.
What we don’t finance are losses, non-operating activities, or distributions that lack reasonably foreseeable resolution. That’s something we’re upfront about. Being clear on how the financing will be used protects both the bank and the borrower.
Q: What support do you offer for businesses that don’t have deep internal finance teams?
Brian: A lot of our clients are owner-led or family-run businesses. They might not have a CFO or a formal advisory team. So, they rely on us for guidance, not just capital. That’s where we really differentiate ourselves. Our bankers know their industries. They’ve seen similar situations before, and they can help clients navigate decisions beyond just the loan itself.
We don’t make 30,000-foot credit decisions. And we don’t walk away from borrowers just because they don’t fit a rigid profile.
Q: Can you give an example of how a relationship made a difference for a client?
Brian: I worked with a company in the automotive manufacturing space who was doing great: profitable, growing, well-run. But their national bank cut ties with them overnight because they didn’t like the sector. No conversation. Just a blanket exit strategy.
We took the time to understand their business. We saw their long-term performance. We stepped in. That client is still with us today.
Those are the moments where a real banking relationship matters. And it becomes even more important when something goes wrong, whether that’s a lost customer, a delayed receivable, or a temporary cash crunch. We want to be the first call our clients make, not the last.
Q: What does risk-based lending look like in practice right now?
Brian: It’s about being thoughtful and intentional. We ask the right questions, get clarity on the borrower’s business model, and structure loans to support long-term health. It’s not just about getting to “yes” or “no,” it’s about understanding how the credit will perform over time and making sure we’re aligned with the client’s goals.
Interest rates will continue to fluctuate. The economy will shift. But strong fundamentals, transparent conversations, and long-term thinking – that’s what always works.
Looking for a banking partner who understands your business?
Our relationship-first approach to lending is built for long-term growth. Connect with a business banker to learn more today.
Disclaimers: This information is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal, tax, and investment advisors.
First American Bank is a Member FDIC.
About First American Bank
First American Bank is the largest privately held bank in Illinois, with over $7 billion in assets and 61 locations across Illinois, Wisconsin, and Florida. Family-owned and operated since the 1960s, the bank offers a full range of financial services, including personal banking, business lending, and trust and wealth management. Known for combining community bank service with large-scale capabilities, First American Bank is committed to long-term relationships, financial stability, and delivering tailored solutions that help customers thrive.
Media Contact:
Teresa Lee
305-631-6400
tlee@firstambank.com
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