Recently we looked at the possibility of getting an SBA loan. In total disclosure – we were not 100% certain we were interested in pursuing the process, for a variety of reasons – but an injection of funds to allow us to grow in a positive direction, quicker than the regular old boot-strapping road might take us…at times appeals wildly in comparison.
However, as we started into it – it became incredibly apparent we were pretty green (pun intended) about the process and unaware of what might be involved. Thankfully for us – SkipJack Partners, and co-founders Cynthia Flanders and Laura Gamble came to the rescue. Cindy helped spell out the process, review our financials and make sure we would be heading into the process ready versus grossly unprepared. I’m convinced that had we even thought about pursuing this without her and her partner’s expertise, we might have found ourselves in the middle of one hot mess, with not much to show for it.
A lot of people hesitate to bring in experts for things they don’t understand, for a variety of reasons. A desire to save money is usually one of them. However, talk about being penny-wise and pound foolish, especially in such an unknown and critical situation. There’s an expertise to funding – and you’re smart if you understand the benefits of paying for it. After all – unless you’re a funding consultant – you’re probably pretty good at what it is you do best, but relatively clueless about this. The value of the time Cindy worked with us ended up proving itself priceless; even if it became apparent that direction of funding wasn’t the right one at the time being for us in particular.
We would have probably chased our own tail to death and gotten dis-heartened or discouraged in the process, had it not been for Skip Jack’s clarity, guidance and patience throughout the process. You can bet that when the time comes to move forward (whether it will be with debt or equity funding), we’ll be picking up the phone and calling Skip Jack again.
According the Karen G. Mills – One of President Obama’s key players in the release of more funds for small business – the money is there…word on the street however, doesn’t match up with that. What’s a small business to believe really? Maybe the article below will provide some food for thought…enjoy it.
What Small Business Lending??
Previously posted on the TheFourteenthBanker.Wordpress.com
“I read the annual reports on all the banks listed below and the information I was able to glean is presented in the table. There is a basic problem. Other than JP Morgan, nobody seems to want to disclose any real information about what they are doing in Small Business lending. Here is my disclaimer. I went through probably 1500 pages of pdf files. I know what to look for.
I searched the terms Small Business and Business Banking in addition to looking through various tabular presentations. Most of the banks just lump their numbers into other numbers. So, it is possible I missed something. If you are with one of those other banks and would like to comment, I will gladly modify my information. Since some large banks present their loan numbers but not deposit numbers, I had to make an assumption. I assumed that the proportion of small business deposits to total deposits is the same for all the banks as it is for JPM. I know that can’t be right, but it is probably close for banks with substantial retail branches.
As you will see from the data, even if I am wrong by a factor of 100%-200%, the conclusions are the same.
Big banks are not focused on Small Business lending.
As I said after the Warren Report came out, we need a Marshall Plan for Small Business credit. The SBA is not the answer. The banks need to get focused. It is interesting that all four of the largest banks, and let’s face it, those are the ones that matter, have close to the same dollars in small business loans. In each case, I would think a respectable goal would be to take their small business lending up to about $100 Billion from the mid teens. That would bring their small business loan to deposit ratio up to about 1/3, give or take.
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