Q. Suppose a business owner doesn’t qualify for a loan at Bank of America? What do you do?
We would give them a pretty good sense of what it would need for them to look like for them to qualify. But we also work with some nonprofit organizations in the community that might be able to work with them. Community development financial institutions — these are by and large nonprofit financial institutions, and we’ve been one of the biggest supporters of these. They’re smaller organizations that aren’t subject to the same regulations as Federal Deposit Insurance Corp. banks. We extended a $110 million grant a couple of years ago to some CDFIs that turned around and leveraged that to the tune of more than 10 times. So they were able to leverage that to more than $100 million that they could then invest or lend directly to small businesses.
If we’re not able to help a client today from a credit standpoint, our goal would be to give them a pretty good sense of, what were the gaps, and what they would need to work on to make the answer a positive one the next time around.
There are other opportunities for us to help them, not just with credit. There are opportunities for us to help improve their cash flow by helping them collect payments, for instance.
Q. What results are you seeing from the 1,000 bankers you’ve placed around the country?
We have a lot of nice charts with impressive trend lines. Let’s talk business lending. I think it’s safe to say that small business owners, their health continues to improve, so balance sheets and cash flows are getting stronger, interest rates are at an all-time low. So it’s a good environment to borrow in. The economy, while not robust, continues to grow. Translated, that equals greater loan demand, and our bankers have a lot to do with that. We’re excited that we were up 28 percent in new loan originations in 2012 over 2011. And through the first four months of this year, we’re ahead of that pace. I feel really good about how we’re delivering credit. But we know we can do more.
We know that the bankers are focused on credit but they’re also focusing on delivering all of our capabilities, not just meeting the needs of the business. They’re also working with other experts, pairing up with financial solutions advisers who will work with small businesses on the personal side – investing solutions, preparing small business owners for retirement or for taking care of their children’s education.
Q. But small business owners are known for plowing every penny they can into their companies. How do you convince them that their personal finances should be more of a priority?
I think part of it is our enlightening small business owners about all that we can do for them. They may just be focused on their business, but we will lead a conversation that will provoke them to think about, are they addressing their kids’ college education? Or are they doing some things that would benefit their employees? Are they doing some things that would help them prepare for retirement? Through our Merrill Lynch platform, our financial services associates were able to introduce some expertise that we weren’t having before we deployed this model. We’re taking a more holistic view, not just the business piece of it, but the personal side as well.