MCBC’s Small Business Lending Roundtable Roundup – Spring 2020

May 02, 2020

Leaders in Small Business Lending Discuss 2019 Accomplishments

MCBC kicked off its 2020 Small Business Lending Roundtable series on January 23rd in Boston at Eastern Bank.

 

Leader Bank and Dorchester Bay Neighborhood Loan Fund highlighted accomplishments from 2019.

 

Leader Bank’s Patrick Daaboul (SBA Administrator) and Sandeep Jain (AVP- Commercial Loan Officer) discussed the institution’s role in the small business lending space as a top five SBA Lender for Massachusetts.

The Massachusetts Small Business Administration’s (‘SBA’) named Leader Bank the Lender of the Year to Minorities in 2019. Last year 58% of the Bank’s loan approvals went to minority-owned businesses. Leader was the #1 SBA Lender to Veterans in 2018.

 

Messrs. Daaboul and Jain explained that as a relatively young financial institution, Leader Bank still thinks like a small business by being resourceful and prioritizing relationships.

 

Customers receive highly personalized service that comes from focusing on respect and cultural sensitivity. Leader Bank has a reputation of being fluent in different communication styles and languages – and for using those resources deliberately to cultivate relationships. If there was one specific takeaway from the conversation it was to, “have better conversations with potential clients from the beginning.”

 

By being focused on relationship building, the Bank has cultivated a reputation as a community resource, not just a source of capital. Leader Bank also works with a number of nonprofit organizations including SCORE, Center for Women in Enterprise, and the SBA’s network of microlenders to ensure customers get access to  technical assistance.

Putting patience and respect at the forefront of the lending model has created positive word of mouth and a valuable referral base that is fueling growth for Leader Bank and Dorchester Bay within the small business community.  

 

Next up was Johnny Charles, Director of Economic Development at Dorchester Bay Neighborhood Loan Fund (‘Dorchester Bay’). Dorchester Bay, the Massachusetts SBA’s Breakout Microlending Intermediary of the Year in 2019, is a SBA microlender and non-depository community development financial institution (CDFI) certified by the US Treasury.

 

Recent investments in market research, a marketing plan, and an online lending platform fueled last year’s growth. The loan funded supported 30 small businesses by extending $278,650 in capital that created or retained at least 120 jobs in 2019.

 

Loan volume and capacity is expected to grow to $925K annually in the next three years. Dorchester Bay currently offers three loan products to address the community’s unmet lending needs, estimated at $3-$5 million. Dorchester Bay services target businesses through the recently rebranded website dorchesterbayloans.org and offices at Dorchester Bay Economic Development Corporation.

Small Business Lending Responds to COVID-19

 

MCBC convened its second Small Business Lending Roundtable of 2020 on Thursday, March 19th.

 

Because this meeting fell just days after President Trump declared a national emergency due to the COVID-19 pandemic, the discussion focused on how the pandemic was impacting small businesses.

 

MCBC asked how state agencies and financial institutions were connecting small businesses with capital and banking services.  Discussion leads included Mass Growth Capital Corp (MGCC), FDIC Boston Area Office, and Interise.

 

Alison Moronta discussed the eligibility criteria and program requirements to access a $20 million Small Business Recovery Loan fund being administered by MGCC.  The loan fund was no longer accepting applications as of 12:30PM on March 19th, 2020.

 

Next, Paul Horwitz, Community Affairs Specialist, FDIC Boston Area Office, reviewed with us Financial Institution Letters pertaining to the COVID-19 outbreak:

 

Paul also reviewed recently released revisions to the Banking Services and Strong Business Credit modules contained in the FDIC’s Money Smart for Small Business homepage curriculum.

 

Closing out the discussion was Nancy Lee from Interise. Nancy recapped the success of its Inclusive Economy conference held in Boston in early March. Video highlights are expected to be released soon.

 

Interise, like many community partners supporting small businesses, was pivoting to respond to the COVID-19 crisis.  Using #SolveIt, Interise asked that lenders and technical assistance providers share ideas to support small businesses and their employees across race and place.

 

Top 3 ‘How to’ concerns Interise heard from small business owners:

  1. Cash flow management
  2. Support employees AND prepare company to ‘survive’.
  3. Locate opportunities during this crisis — and re-purpose current work.

 

Getting Capital to Small Businesses Hardest Hist by COVID-19

MCBC’s most recent Small Business Roundtable was held on April 30th.

 

Discussion leads from the Mayor’s Office for Economic DevelopmentLending FrontLISC Boston and Citizens Bank shared insights and updates on new initiatives to connect small businesses in Boston with capital and banking services during the COVID-19 pandemic.

 

Austin Williams, shared how the City is supporting small businesses, with a focus on Small Business Financing programs, particularly the creation of the Small Business Relief Fund to aid businesses most impacted by COVID-19.

 

LISC Boston recently announced the launch of the LISC Small Business Recovery Grant Program for Massachusetts.

 

The program provides grants of up to $10,000 to mitigate economic instability and increase the likelihood of business survival.  Launched with seed funding provided by Citizens Bank, the Small Business Recovery Grant Program is part of the LISC Rapid Relief & Resiliency Fund for Massachusetts.

 

Karen Kelleher, Executive Director of LISC Boston, reported the fund had nearly 4,000 applicants in the week in which applications were taken. The applicants were from 26 communities and 66% had annual revenue of less than $300K.  LISC Boston is actively fundraising to assist more applicants.

 

LISC Boston also announced the Massachusetts Equitable PPP Access Initiative to ensure timely and equitable access to the SBA’s Paycheck Protection Program loans. Please find more information here.

 

LendingFront is a MassChallengeFinTech partner collaborating with City of Boston. It works w/ banks, community banks, leasing companies, and CDFIs to provide an end-to-end loan origination, underwriting, and servicing platform. Learn more here.

 

As a reminder, roundtables are open, informal and collegial exchange of insights. For the foreseeable future, MCBC will host roundtables remotely. Membership in MCBC is encouraged to sustain our efforts, but is not a requirement to attend roundtable meetings. Dates for MCBC’s Mortgage Lending and Small Business Lending Roundtables are on our website.