Investing in our small businesses
The business of America is business. What an age-old, long heralded, and somewhat archaic statement of the obvious.
The truth is that the business of America has for long been, and continues to be, small business. It has literally driven the economy and the better part of new job generation in the United States for decades.
Despite this truth, the love from American banks and financial institutions—up until recently—continued to be showered upon big business alone. The eye was upon and the fight was always for those big commercial relationships, large lines of credit and installment loans.
In the trenches—where the real business was happening—only a cursory glance was being cast.
To take a close look at how the banks treat small business today, however, is illuminating. While Mrs. Loman, in the classic A Death of a Salesman, was referring to the beating of a human heart and the bleeding pathos of just one life when she cried out, “Attention must be paid!”, the banks have, for some time now, stopped ignoring the tea leaves and begun giving the small business sector some of the attention that it deserves.
Sure, the banks all have their unique and sometimes fascinating stories, and together they seed every kind of charity and community endeavor. They scrape and claw to distinguish themselves. Yet on the small business front they, for the most part, move forward in lock step.
The histories differ.
Lakeland Bank, for instance, only exists because two Sussex County businessmen, John Fredericks of Fredericks Fuel and Robert Nicholson of Eastern Propane—try as they might—couldn’t get one of the then prominent Passaic County banks (which no longer exists) to open a single branch in Sussex County.
They were left with no alternative but to start their own and today, having recently been designated as one of “America’s 50 Most Trustworthy Financial Companies” by Forbes, Lakeland’s more than 50 branches across northern New Jersey are thriving.
History does fascinate and for Provident Savings Bank, it is now 175 years old. With $7.5 billion in assets today, they opened in 1839 with a couple of hundred dollars in a tin can. Jersey City-based, they celebrate their 50 year relationship with Calandra’s Bakery on their website.
A personal and strong banking relationship, Provident provided a sustained personal commitment and the financial tools to help them grow from a five employee believer to a 750 employer high achiever. Beyond the formal tools, this video about Calandra’s on the Provident Bank website, speaks to what a banking business relationship can and should be. It is worth a look.
But in perusing the Lakeland and Provident websites along with a dozen other institutions, the tools appear similar. Be it Citibank with their mega billions and their eye on the nation, Bogota Savings Bank with their millions and their eye on the communities of Bogota and Teaneck, or a Spencer (All the Bank I Need) Savings Bank and its focus upon the Paterson Habitat for Humanity and the Garfield Boys and Girls Club—the small business products are alike. The marketing taglines may well be different and the capacity to deliver even more different, but they are all touting one-stop shopping, streamlined payment processes, remote deposits, equipment purchase packages and similar lines of credit and installment loans.
It took a long time for the attention to be paid to small business and it finally has. While the lines of service are similar, the human touch of each is different. And finally—finally today—some of the banks appear to want to give them the love as well as the attention.
I enjoyed conversations with representatives from three banks and a federal credit union who all suggest that, “The times, they are a changing.”
I was surprised to learn from Dennis Fitzpatrick, the Director of Lending for the XCEL Federal Credit Union, that they are venturing into the small business marketplace. With a rich gregariousness, he said, “The regulators have been loosening their belts. I never thought that we’d be skating on the same small business pond with the banks, but we are.”
He explained that they will have to walk before they run, beginning with small lines of credit and commercial loans. “But we’re building now on the grass roots level and it has been really successful. We’re very excited about what we’re building,” he said.
He added, “We’re small, but appealing person to person as we are, we’re going to build this, brick by brick, on the strength of good old fashioned personal service and attention.”
Marc Piro, Senior Vice President for Valley National Bank, and Daniel Sorrell, First Vice President & Community Lending Team Leader, told me that they felt that they already were ahead of the curve in servicing small business but that they will now be going in an entirely new direction.
“We long had a commercial lending product minimum of $10,000, what was much smaller than most banks,” said Sorrell, “But we just announced the formation of a new Retail Small Business Lending Division which will offer an unprecedented minimum of $5000. This new division will attend to the $5000 to $100,000 market.”
He noted that they of course also will remain keenly focused on the $100,000 to $500,000 markt, and beyond as well.
“Our bank is loudly saying that we intend to treat every customer, however large or small, with the same level of service and the same level of respect. With this new direction, we are attending to a formerly undeserved demographic with new limits, new processes and renewed commitment.”
I learned that TD Bank, designated America’s Best Big Bank by MONEY Magazine, offers seven days per week banking and late hours to better accommodate busy small business customers.
“Our small business lenders truly get to know our small business owners as they develop personal working relationships,” said Don Buckley, TD Bank Market President (Northern New Jersey). “They advise them of the right type of loan or banking product to meet their unique needs.”
Serving all types of businesses, from professional services to medical to manufacturing, they also offer all of the traditional SBA products.
“TD Bank also runs the Veterans Franchise for the SBA,” added Buckley. “We offer U.S. military veteran franchisees in companies such as Dunkin’ Donuts, Domino’s Pizza and Baskin-Robbins a streamlined loan application process, a packaging fee waiver and lower interest rates. This is one great program.”
“I don’t know if we’re unique or different,” said Rabhar Ameri, Vice President & SBA Director of Kearny Federal Savings Bank, “But what I do know is that we make an absolute effort to market to—to get to know and to serve the small business community.”
A Preferred SBA Lender, they have an experienced team of SBA professionals who ensure that small business customers receive both the best of options and the best of care. Kearny Federal Savings currently provides SBA financing via the 7(A), Express, and 504 programs. Clients that want to purchase real estate for their businesses also can obtain up to 90 percent financing, a huge advantage considering real estate prices in New Jersey. They also can take advantage of the SBA Small Loan credit scoring program, which speeds up the approval process for loans up to $350,000.
And like TD Bank, they too participate in SBA’s Veterans initiative, a small way of giving back to veterans for all that they do.
“These veterans come back home with minimal to no credit history and minimal personal income which can make financing difficult. But they also come back with degrees, skills, and trades that can contribute to success in any venture,” said Ameri. “So we honor that and we are enjoying helping these veterans through this great program.”
“We actively reach out to the small business community to let them know how ready we are to work with them,” added Ameri. “We do so through chamber networking and outreach events and by advertising in SBA’s Resource Guide, local newspapers and New Jersey Transit on trains and busses.”
Yes, the times are changing. For once upon a time, our financial institutions catered to the big guns alone. But decades ago, as far back as the 60s and 70s, great changes in the American economy demanded both reconsideration and redirection. Still, it took a long time for real attention to be paid and one can make the argument that the 2008 Economic Stabilization Act or TARP money never trickled down—to the extent that it should have—to the small business community.
Just seven years later, however, that seems like light years ago. More attention is being paid to small business today than ever before and the SBA has become a force.
Yes, the small business community is finally feeling the love and the respect. There is a balance and equity in the capital and financing marketplace that has changed the processes and the dynamics that, once upon a time, underserved the small business community.
The business of America, after all, is small business.
By Rich Fritzky, Retired President & CEO of the Meadowlands Regional Chamber and Founding Editor of Meadowlands USA.