A longtime environmentalist and finance leader, Vince has served as CEO at International Savings Bank of San Diego; president and CEO of the Danielson Trust, a $1.5 billion company providing investment management services; and COO at First National Bank. Under his management as CEO, 1st Pacific Bank of California was named the best-performing de novo bank in California by The Findley Reports, a banking consulting firm. Vince has been a member of the board of governors of the Savings and Community Bankers of America and the National Trade Association for the savings and loan industry, as well as a board member of the California League of Savings Institutions. He serves on the advisory board of the American Sustainable Business Council and is chairman of the board for the Ken Blanchard Center for Faith Walk Leadership.
NerdWallet ("NW"):Please describe your bank.
VS:New Resource Bank is a mission driven bank that lends to businesses in the clean energy, energy efficiency, organic food, green products and green building fields. We were founded in 2006 by a group of entrepreneurs, banks and business leaders seeking to bring new resources to sustainable businesses. In 2010, New Resource underscored its commitment to serving people, planet and profit by becoming a Certified B Corporation.
NW: What is the role that community banks play in the small business lending space, especially in comparison with other lenders (big-banks, credit unions, alternative lenders, micro-financers, etc)?
VS:Community banks are the largest lenders - we make 50% of all small-business loans. Additionally, we provide personalized service. Think of it as "custom credit" - we're smaller than large banks, service small to mid-sized businesses, and take the time to get to know the borrower.
NW: How do you see small business lending evolving in the next year?
VS:I'm not sure I see it evolving that much. I do, however, think that one of the greatest needs that is currently not being fulfilled are lines of credit for under $250,000. This particular need is difficult for community banks to service profitably - often the borrowers are less sophisticated and require more technical assistance.
NW: What advice would you give a small business owner?
When you go in to talk to the bank, be prepared to answer how much money you need to borrow, for what uses, and how you'll repay the money. Also, come equipped with financial results and records as well as projections for the future.
More importantly, we'd like to see your "plan B"- what if revenue doesn't come in as much as you predicted? What if your margins were hurt? What is the Plan B?
Otherwise, the 5 C's of credit are a pretty good benchmark:
- Cash flow: after all, loans are repaid by cash flow, not collateral
- Capital - you have to have it already to get it, we need to see that there's some capital in the business
- Conditions: economic/industry/environment - are they favorable?