As a commercial lender or CPA, are you an industry disruptor?  Are you proactively approaching every small business client and arming yourself with creativity and innovation?  If so, you’re creating abundant opportunities to help more borrowers and business owners while setting yourself apart from the pack.


Be the Disruptor, not the Disrupted

We all recognize Netflix, Apple, Uber, and Airbnb as the faces of industry disruptors.  These are companies that recognized gaps in the service offering of their respective field and, by re-imagining the concept, turned the entire industry on its head.  Co-founder and CEO of credit check company ClearScore, Justin Basini, says that a disruptive brand must be able to identify a new opportunity the established brands fail to see.  “A disruptive brand goes in and sees a new proposition in the market that can either deliver distinctive value or do something that’s already being done but do it so much better to create disruption in that market and value for the user.”

So, how does this apply to the small business client sector?

Disrupt what clients have come to expect from their financial advisors.  Do you notice many in your field simply waiting for opportunities to land on their desk?  Imagine if you proactively sought to help clients and took the approach of, “hey, I’m looking out for you and I’ve already researched some options for how to best address _______”.


Timing and the Power of Alternative Financing Tools

Meeting with your clients regularly and knowing their goals, roadblocks and challenges allows you to be proactive in offering solutions…possibly before they even realize there’s an issue.  Are they looking to grow and when?  What types of loans do they currently have and when do they mature?  Do they own their business property?  Will they soon be forced to comply with costly renovations set forth by a franchise agreement?  Do they need to replace a piece of equipment?  Have they been facing skyrocketing rent increases?  Is a future road construction project going to hinder the ingress/egress of their business?

These are just a few of the obstacles your clients may be facing.  Do they have them on their radar?  Or is this an opportunity for you to establish yourself as their trusted advisor?    Ask questions.  Troubleshoot.  Investigate options.  Be creative and use innovation to get past roadblocks.  Utilize alternative financing programs.

For example, a manufacturing company near Chicago was four years into their mortgage payments and business was booming.  However, with a five-year term loan, the balloon payment was quickly approaching.  A savvy financial advisor stepped in well in advance of the “crisis” and offered a recommendation for refinancing with the SBA 504 Program’s Refinance Loan…a long-term financing option with low fixed interest rates.  This allowed the client to stabilize their expenses and spread these predictable payments out over 20 years.


Use Creativity and Innovation in Structuring Deals

Today’s lending climate is governed by policies, procedures and back-room box-checking.  Sometimes borrowers don’t meet all the requirements, and this results in an automatic decline.  However, there was something to be said for the good ‘ol days when a commercial lender would know their borrowers and advocate for their needs…even if it didn’t always make sense on paper.  Although we can’t change the fact that it now must always make sense on paper, many give up at the first “no”.  Maybe the deal could be re-structured or maybe there is an alternative financing program that could help.

For instance, a company in Southern Illinois was facing major renovations and energy-saving upgrades on two facilities in order to comply with the conditions of a franchise agreement.  The cost was steep.  With salaries and other expenses, working capital was hard to come by and it appeared the assistance of the SBA was out of the question because the costs were higher than SBA’s lending limits would allow.  However, a little creativity by the commercial lender saved the day.  Since the renovations included the energy component, an SBA 504 “green” loan could be used which allowed for up to $5.5 million per project.  The borrower was able to capitalize on all the benefits of SBA loans, including low equity injections and long-term amortizations, while fulfilling the renovation requirements set forth in their franchise agreement.


The Payoff

When you take the long-view on every client, and strive for relationships as opposed to transactions, you’ll undoubtedly open yourself up to referrals, retentions and new business opportunities.  After all, one of the greatest satisfactions in your career is helping someone achieve their goal.  Constantly asking yourself how you can better understand your clients’ businesses will help identify even more areas where you can add value.


About the SBA 504 Loan Program

The SBA 504 Loan Program is an economic development tool that provides small businesses with long-term, fixed rate loans to help them acquire major fixed assets for expansion or modernization of their businesses.  These loans are most frequently used to acquire land, buildings, machinery or equipment.  A 504 loan can be a 10-, 20- or 25-year term, which is beneficial for small business owners.  Pairing the fixed rate aspect with these term lengths gives small business owners stability, allowing them to budget and manage cash flow without concerns about rising rates or balloon payments.


About Growth Corp

Small Business Growth Corporation (Growth Corp) is a nonprofit, mission-based lender dedicated exclusively to connecting small businesses with quality expansion capital through administration of the SBA 504 Loan Program. With a commitment to economic development, job creation and the small business sector, Growth Corp is ranked a Top 10 National CDC for SBA 504 loan volume and is Illinois’ largest 504 loan provider.  In fact, Growth Corp’s substantial portfolio ($700+ million) is particularly impressive because every dollar was utilized by Midwest entrepreneurs to open and expand their small businesses.  Contact any member of our lending team.