Where national clout meets local activism
Shea: This is a people business, and we have in Worcester and Central Massachusetts a very experienced team. Most of our client managers have served customers in this area for periods ranging from 18 to 25 years. In addition, because it is Bank of America, we can offer enormous financial resources and a great depth and breadth of products. Furthermore, our geographic reach is unparalleled. So if a business customer operates in other parts of the country, we are the logical choice. And when it come to service quality, we have a group of people who are very anxious to take action on behalf of their clients every day.
WBJ: Describe your typical client manager
Shea: In business banking, where we focus on companies with annual revenues from $2 million to $20 million, our client managers are generalists. Their portfolios include companies in all sorts of fields — law firms, manufacturers, retailers, and so on. But as client companies grow and need more sophisticated assistance, we can link them to our groups serving specialized fields, such as high tech, government lending, and health care.
WBJ: What trends do you see in SBA lending?
Shea: Express loans have been very popular. Under this program, the SBA guarantee is 50% versus up to 85% in the main SBA 7(a) program, but funds are available in as little as 36 hours. Another critical program is the SBA 504 program. Here, the borrower puts up 10% of the equity, say, for purchase of land or equipment. The bank provides 50% of the financing and a certified development corporation adds the remaining 40% of the funds. Our SBA 504 loan program tracks the number of jobs generated. For every $40,000 invested, a job is created to comply with the SBA Policy.
WBJ: Versus a decade ago, how difficult is it for small businesses to obtain financing?
Shea: I don’t think it’s more difficult. And if you are a strong company, it is much easier because of increased competition among banks. Banks have become more industry focused, which enables them to establish better parameters for doing business in specific fields. Compared to 10 years ago, banks also are much quicker in delivering credit, primarily because of technology.
WBJ: What can businesses do to maximize chances for credit approval?
Shea: Establish a relationship with an experienced banker, even if your company is a startup. I expect our client managers to help new businesses develop strategies so that they can get future financing either from our bank or another lending source. We are very willing to spend the time to help firms assess where they are today in their business plan and where they need to be tomorrow.
WBJ: What strategies do you use for community reinvestment?
Shea: Bank of America invests heavily in affordable housing, a key challenge facing Worcester and Massachusetts as a whole. We are major partners with Plumley Village Development and recently renewed our support of the Gardner Kilby Hammond Initiative to revitalize the neighborhood near Clark University. Our Neighborhood Champions home loan program targets those in civic services, like health care workers, teachers, police officers and firefighters. And our first-time homebuyer program ranks as one of the nation’s best. In addition, we are ready to introduce a 40-year mortgage program, which will spread the burden of payment over a longer term.
WBJ: How about the bank’s commitment to philanthropy?
Shea: Bank of America through its foundation follows a giving philosophy that we call "neighborhood excellence." The bank empowers local market presidents and local market leadership teams to determine causes with the greatest impact on communities. In Worcester, we focus on youth education, community development and arts and culture activities in under-served areas. Bank of America plans to donate approximately $200 million nationally in 2006, one of the most aggressive commitments of any corporation. In Massachusetts, we will donate approximately $10 million, and we expect the Worcester-Central Mass. area to receive a healthy share of that.
This interview was conducted and edited for length by WBJ Chief Editor Larry Maloney.
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