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SBA Bank Solutions ABA Slide Show

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We recently attended the 2018 ABA Mega Conference in Little Rock and enjoyed getting to know community bankers all across the state of Arkansas. At Bank Solutions, we understand the tough balance it takes between managing internal resources, keeping up with changing regulations and maintaining a high-performing loan portfolio.

That’s why every day we help banks like yours build strong, profitable and most importantly, compliant SBA loan portfolios that facilitate small business growth.

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SBA Bank Solutions ABA Slide Show

  1. 1. SWIMMING with SHARKS SBA waters are friendlier than you think, and awash with profits—not predators
  2. 2. Informal Poll ❏How many banks with assets less than $500 million? ❏Who currently does SBA lending? ❏Who has delegated authority (PLP)? ❏Who has a Chief Information Officer or Technology Department?
  3. 3. “Small banks with less than $500 million in assets that wish to remain independent face challenges.” – Julie Stackhouse, Exec VP, Federal Reserve Bank of St. Louis
  4. 4. Lender Service Provider If that’s the boat you’re in... ✓ Growth challenges ✓ Profitability challenges ✓ Brand challenges
  5. 5. Challenges of the Rural Arkansas Bank ❖ Planning for the Future ❖ Cyber Threats ❖ Bank Consolidation ❖ Ability to Hire ❖ Loss of Population ❖ Financial Technology Demands
  6. 6. A STATEMENT OF STRATEGY Branding your bank as SMB-friendly is a decision… and a commitment.
  7. 7. Lender Service Provider Who’s the brand leader in your market? It could be you.
  8. 8. Lender Service Provider What we’re talking about: CHANGE
  9. 9. Lender Service Provider Changing the way you think...
  10. 10. Lender Service Provider SMBs are constantly looking online ✓ Management ✓ HR ✓ Accounting and yes, ✓ FINANCING
  11. 11. Lender Service Provider Tech platforms reinventing lending
  12. 12. Lender Service Provider Online SMB lenders
  13. 13. Lender Service Provider Difference is night & day
  14. 14. Lender Service Provider Successful SMB-branded banks are using SBA as a powerful lending tool
  15. 15. Lender Service Provider We ain’t getting our share
  16. 16. Lender Service Provider It’s not enough to hang a shingle... You have to build a brand.
  17. 17. Lender Service Provider
  18. 18. Lender Service Provider Changing the way you work...
  19. 19. Lender Service Provider Heck, No Dabblers All In! 3 types of SBA Lenders
  20. 20. Lender Service Provider SBA Dept. Strategic Decision:
  21. 21. Lender Service Provider 1. Economics — Immediate profitability at a variable cost 2. Scalability — Experienced staff at any volume 3. Continuity — Proven processes and continuity at both the position level and overall department level Outsourcing Advantages
  22. 22. Lender Service Provider Bottom Line Focus BOOST PROFITS CONTROL COSTS
  23. 23. SBA SHARKS Hint: There Are None
  24. 24. Harpooning mythical SBA Sharks
  25. 25. Lender Service Provider All SBA loans are alike
  26. 26. Lender Service Provider All SBA loans are alike The truth is, there are SBA loans for very diverse and specific purposes. ▪ That’s great for tailoring to customers, but it presents a complex landscape to navigate without expertise. Bank Solutions simplifies the process toward becoming a Preferred Lender.
  27. 27. Lender Service Provider All SBA lenders are the same
  28. 28. Lender Service Provider All SBA lenders are the same There are various categories of lender programs ▪ SBA 7(a) ▪ CDC / SBA 504 ▪ SBA CAPLine Lines of Credit ▪ SBA Export Loans ▪ SBA Microloan Program ▪ SBA Disaster Loans
  29. 29. Lender Service Provider SBA sometimes fails to honor its guarantee
  30. 30. Lender Service Provider SBA sometimes fails to honor its guarantee SBA has a legal responsibility to honor the guarantee. Banks without experience fail to meet necessary conditions: ▪ Failure to comply with SOPs ▪ Failure to make, close, service or liquidate a loan in a prudent manner ▪ Lender has failed to disclose or misrepresented a material fact to SBA ▪ Lender has failed to pay the guarantee fee
  31. 31. Lender Service Provider It takes additional bank staff to administer SBA loans
  32. 32. Lender Service Provider It takes additional bank staff to administer SBA loans Not any more than any other loan you make. It is true submission and servicing takes specialized diligence. ▪ The Bank Solutions process saves your loan officer processing time when he/she could be developing personal banking relationships. ▪ The Bank Solutions process provides the diligence necessary for servicing, reporting and compliance.
  33. 33. Lender Service Provider It takes forever to get SBA loans approved
  34. 34. Lender Service Provider It takes forever to get SBA loans approved This misconception relates directly to inexperience: ▪ Diligence ▪ Underwriting ▪ Submission Our experience means the process takes no longer than traditional loans.
  35. 35. Lender Service Provider Now see things more clearly...
  36. 36. How SBA helps build your SMB brand ● Guarantee especially helpful with under-secured good loans ● More fee income (secondary market) ● Expanded lending limits, increased liquidity ● Ability to refinance EXISTING loans ● Variable rates generate higher yields ● Lower capital and loan loss requirements ● CRA implications and applications ● Rapid portfolio growth
  37. 37. Lender Service Provider AG = SMB Here’s the kicker:
  38. 38. SBA & PROFITABLE GROWTH… With Agricultural Lending
  39. 39. Lender Service Provider Jump in!
  40. 40. Lender Service Provider Most Every Community Has These Businesses Top Loan Categories Since 2004: ❖ Liquor Stores ❖ Physicians ❖ Child Day Care Services ❖ Veterinary Services ❖ Offices of Dentists SBA Opportunities in Rural Arkansas ❖ Restaurants (Limited Service) ❖ Gasoline Stations ❖ Hotels and motels ❖ Restaurants (Full-Service)
  41. 41. Lender Service Provider Since 2014: ❖ $446 Million in Arkansas SBA Ag Loans ❖ 80%+ were poultry-related ❖ Average cost of 8-house poultry farm: $3.5 million Arkansas’s Unique Ag Opportunities
  42. 42. Lender Service Provider 2019 - 2024: Just Think Chicken ❖ Potential $6-700 Million in Arkansas SBA Ag Loans ❖ Potential Refinances/Sales from Distressed Properties ❖ Existing Retrofits and Major Upgrades Arkansas’s Unique Ag Opportunities
  43. 43. Lender Service Provider Addressing the Ag Opportunity ❖ Excess Land ❖ Environmental Issues ❖ Equity Injection ❖ Affiliate / Franchise The Bad News – an OIG Report pointed out bad practices resulting in more stringent requirements The Good News – there‘s ways to mitigate the issues
  44. 44. Lender Service Provider SBA Ag Loans In Arkansas ❖ Beef Cattle and Farming ❖ Hog and Pig Farming ❖ Soil Preparation, Planting and Cultivating ❖ Logging ❖ Nursery and Tree Production ❖ Others NAICS Classifications Besides Poultry FY 2014 thru July 2018
  45. 45. Lender Service Provider SBA Ag Loans In Arkansas ❖ Beef Cattle and Farming - $2,344,600 ❖ Hog and Pig Farming - $6,116,600 ❖ Soil Preparation, Planting / Cultivating - $575,000 ❖ Logging - $6,220,000 ❖ Nursery and Tree Production $350,000 ❖ Others NAICS Classifications Besides Poultry in Dollars FY 2014 thru July 2018
  46. 46. Lender Service Provider BE THE BANK in your market that SMBs turn to FIRST
  47. 47. Lender Service Provider USE THE SBA to serve SMB clients and boost PROFITS
  48. 48. Lender Service Provider Further Discussion
  49. 49. Thank You

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