A: We were able to lend to an existing borrower who operates nursing homes and wanted an additional loan to construct
a new facility. The borrower was on the edge for credit approval but with SSBCI loan participation, the proposed loan was
saved. As a result, the borrower was able to add around 20 jobs.
Finally, I spoke with David Jackson, vice president and national director of SBA Lending for Fifth Third Bank, a regional
bank based in Cincinnati that participates in SSBCI’s collateral support program across several states.
Q: You are now the nation’s biggest institutional participant in SSBCI. Can you talk about the origins of your partnership
with SSBCI?
A: We had some experience with a similar state collateral support program instituted successfully in Michigan, so when
we found out that other states would be offering credit enhancement programs through SSBCI, we knew we wanted to
participate.
We’ve now done over $35 million in loans in Michigan alone.
Q: Under SSBCI, each state administers its own programs. Has working across state lines been an issue for you?
A: We haven’t faced significant hurdles, despite Fifth Third using centralized underwriting for the loans. There are
different reporting requirements which required some logistical work, but things are running quite smoothly.
Our biggest
task now is extending the success we had in Michigan in working with local state and trade associations in promoting the
program in the other states where we are operating.
Q: Being such a successful participant, could you offer a word of advice to banks looking at the program?
A: If you decide to participate, keep the lines of communication open beyond your borrowers’ relationship managers.
Make sure you educate your credit staff as well as others who will be seeing the requests for the first time. You may find
that the credit staff will identify opportunities to use the program as frequently as relationship managers.
Also, I would suggest a bank pick the programs that it believes will provide the biggest benefits to its customers. Don’t
feel compelled to offer all the programs that your state offers if you feel they may not be as useful.
I was looking at a
whole host of programs initially, which is rather daunting. I ended up picking the collateral support program which was the
most successful of the two in Michigan.
Bankers agree that SSBCI offers user-friendly credit enhancement tools that can facilitate lending to borrowers who would
not have been able to obtain credit otherwise. Increased lending to credit-worthy small businesses will lead to jobs and
more stable communities.
We invite you to learn more about the SSBCI and the programs offered by your state. For
more information, please visit us at www.treasury.gov/ssbci.
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Commercial Insights | Risk Management Insights – February 2013 | ABA Center for Commercial Lending & Business Banking | aba.com
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