Funding the Dream

A look at what local financial institutions have to offer small business.

Discovering one’s passion and how to channel it into a business is often times the easy part in the process of creating a small business, but finding the proper funding channels can be the deciding factor of whether a fledgling business sinks or swims.

This summer, First NBC Bank announced a new partnership with the Louisiana Chapter of Entrepreneur’s Organization (EO). Part of a global business network of more than 11,000 entrepreneurs in 150 chapters and 48 countries, the Louisiana Chapter includes almost 60 members, all of which take in a minimum of $1 million in annual sales. For those that haven’t yet reached that level, the EO offers an accelerator program to help them along.

“The partnership with First NBC started in about February or March and will continue for the next three years,” says Mark Lewis, strategic alliance chair for the Louisiana EO. “They are one of our exclusive strategic partners and we’re excited to have them committed to working with our members.”

Lewis says that the partnership is a good fit because “while some bigger banks have a lot of rules that prevent them from thinking outside the box, First NBC is able to look at other ways to evaluate the growth and success of a business.

“With SBA loans, we’re able to work with small down payments and do longer terms than conventional loans.” Donald Peltier, vice president of SBA lending at Fidelity Bank

Sunay Patel, owner of Jefferson Fiberglass is one of the EO members that have worked with First NBC.

Patel was living in Dallas and looking to purchase a business in Harvey with his brother.

“Jefferson Fiberglass is a 50-year-old manufacturing company with great employees but it didn’t have great cash flow,” Patel says. “My brother and I both had perfect credit, were experienced business people and could inject enough capital and had plenty of collateral. The only hitch was the cash flow. We would tell each bank that as we came in and they would all say, “no problem,” but it was. None of them would take the chance. Fortunately, First NBC was able to see the complete picture. Six months later, we already have positive cash flow.”

Donald Peltier, vice president of SBA lending at Fidelity Bank, works with startups every single day.

“The biggest needs for this group are typically money for lease hold improvements, equipment and inventory and working capital,” he says. “With SBA loans, we’re able to work with small down payments and do longer terms than conventional loans.”

A full service bank with 18 locations on the Northshore, Southshore and Baton Rouge, Fidelity has strong relationships with local small business development centers, including LSBDC at Southeastern University in Hammond and the UNO Small Business Development Center in Metairie.

“Those programs help entrepreneurs create business plans and then funnel them to banks like us,” he says, “where we can also offer things like business checking accounts, merchant services for credit card processing and business credit cards and lines of credit.”

“Rather than touting or pushing banking products, our bankers actively listen and seek ways to help clients find solutions.” – Jeffery Ehlinger Jr., EVP, market area president at First Bank & Trust

Peltier says he’s definitely seen an uptick in small business customers over the past few years.

“Compared to just three to five years ago, there’s been a real increase in startups here in Southeastern Louisiana,” he says. “Louisiana definitely has the entrepreneurial spirit.”

One of the continuous themes with banks is that banking with small businesses is all about relationships and helping the community thrive.

“Rather than touting or pushing banking products, our bankers actively listen and seek ways to help clients find solutions,” says Jeffery Ehlinger Jr., EVP, market area president with First Bank & Trust. “Over time, our bankers become trusted business advisors and they focus on creative alternatives to help their client launch, grow and prosper. The bank provides convenience for its business clients by offering innovative online banking and treasury products; which allows our customers to focus on the daily challenges of running their business.”

JPMorgan Chase & Co. has made assisting local small businesses around the globe one of its top priorities with its “Small Business Forward” initiative, which “supports small businesses by connecting them to critical resources to help them grow faster, create jobs and strengthen local economies.”

“Generating economic opportunity is what JPMorgan Chase does each and every day,” says Chairman and CEO Jamie Dimon on the SBF page of the company’s website. “Our support of small business is one more way that we add value for our communities. By helping regional economies build on their core assets to develop thriving enterprises, we are helping to create jobs and build a more prosperous society.”    

“A lot of our giving has been focused on growing small businesses and growing the small business ecosystem in this region.”
– Erika Wright, senior program associate of global philanthropy for JPMorgan Chase & Co.

In New Orleans, JPMorgan Chase & Co. works with several non-profits to reach local entrepreneurs and help them achieve their business goals.

“All businesses are essential pieces to improving economic opportunity, especially in New Orleans,” says Erika Wright, senior program associate of global philanthropy, Office of Corporate Responsibility for JPMorgan Chase & Co. “A lot of our giving has been focused on growing small businesses and growing the small business ecosystem in this region.”

Wright oversees the Louisiana region for the company, which has worked to support industries aligned with ProsperityNOLA, a comprehensive development plan “designed to ensure the city’s vitality for its tri-centennial in 2018 and beyond.”

JPMorgan Chase’s global philanthropy division has relationships with several non-profit organizations, including Good Work Network, Propeller, The Data Center and New Orleans BioInnovation Center.

“On the global philanthropy side, while we’re not providing direct assistance or access to capital, we are supporting organizations that are working with small businesses and the entrepreneurs of the region,” Wright explains.

The financial institution offers an open letter of inquiry process and encourages potential entrepreneurs to reach out.

“If folks are interested in connecting with JPMorgan, they can go to our website and submit ideas or proposals to us,” Wright says. “We also make a point of being on the ground and in the community so that we’re kind of aware of different projects that are emerging.”

The Importance of Small Business

•  24 million – full-time jobs the United States needs to create by 2020 to bring national unemployment back to pre-recession rates.

•  99.7% of U.S. firms are small businesses (< 500 employees)

•  28.2 million – total number of small businesses in the U.S.

•  63% of net new private sector jobs since 1993 were in small businesses
•  48.5% of total private sector employment is affiliated with small businesses
Source: JPMorgan Chase & Co.

Step by Step

Greg Jordan, area manager in the Southeast Region for Chase Business Banking, explains his company’s process of working with local entrepreneurs.

The Idea

“If they come in with an idea, we’ll sit down with them and we’ll try to map out for them what their idea is, what their particular business plan is.”
The Business Plan

“If they don’t have a business plan, we refer them to CDCs (Certified Development Company) that often help them to sit down and write the business plan. If they come in with a business plan, then we start the next step, which is trying to qualify them personally.”

Qualification & Evaluation

“When an entrepreneur has a business plan, and they’re looking for capital, we often have to rely upon their personal strength as a guarantor. We evaluate their personal financial situation, and try to look for resources and assets tthat might help us to approve them for some kind of a small line of credit, term loan or any kind of credit. From there — depending upon the strength of the guarantees that they bring, the strength of the company that they may have and the assets that they’ve incorporated that company with — we will determine how far we can go in helping them with accessing credit and what their capacity is for credit. As we evaluate their situation, that’s again where we try to determine if they’re eligible for some of these great SBA (Small Business Administration) programs.”

Finding Capital

“Many of our CDCs have several programs that are available for the startup entrepreneur looking for capital. As we work through their issues, we try to help them and guide them to the right places for capital.”

The Follow-up

“We try to help them get the capital that they need, and then we often require some of these startup companies to come in and visit with us consistently every month or two, where we can sit down and see how things are going with the execution of their game plan. As we stay close to them, watch them grow and look at their financials, we make comments as to how they can continue to make themselves bankable, we hold their hand through the process until they can get to the point where maybe they’re not reliant upon an SBA guarantee program anymore. At that point, their credit capacity increases as they move toward executing their business plan and they’re generating cash flow and getting themselves ready for the next step.”

Categories: Banking, The Magazine