The majority of Connecticut businesses — 97 percent — employ less than 500 people, according to Small Business Administration (SBA) numbers cited by the Connecticut Economic Resource Council Something they have in common is that they all need funds to grow.
Connecticut SBA lending has risen steadily over the past five years, according to the administration; its 7a and 504 loans totaled 811 in the last year valued at $254,272,000.
No matter how many Connecticut small businesses open or how quickly SBA-loan demand grows, Webster Bank remains solid in its commitments to clients and its comprehensive process of working with business owners.
Collaborative support
The SBA doesn’t just hand out loans to small businesses.
Rather, it engages trusted partners — such as Webster Bank — to work with business owners on guidelines that will reduce lender risk and support owner success. In order for such a transaction to work, it has to produce a successful outcome for everyone. Strong relationships are the conduit. Business owners who have dealt with impersonal banks see a different mode of operation at Webster.
“We review business plans and meet with them multiple times,” said Robert Polito Jr., Webster Bank director of government guaranteed lending.
“We spend a lot of time with these folks: learning who they are and where they are from. I love doing this. But if I get a sense they may not be ready, I ask them to come back with a more detailed business plan that meets SBA guidelines. I do them no favors by lending them money they can’t repay.”
For the small-business sector, Webster Bank’s experience and dedication opens up opportunities. It makes the financing of operating capital, fixed assets and business acquisitions — the building blocks of small companies — possible.
The bank is not the only one that partners with the SBA, but is recognized as one of the best SBA lenders in the state.
In the fiscal year ending September 30, 2018, the SBA Connecticut District Office backed 864 loans totaling $317 million. The SBA named Webster Bank as winners in the Top Lender by Dollar and Top 504 Third-Party Lender by Volume state categories.
“We were the No. 1 bank in all of New England for lending in dollars,” said Polito. “To beat out all the other banks …. Well, I’m still over the moon about it.”
Active in acquisitions
Where Webster Bank has made a name for itself in SBA lending overall, acquisition lending is where the institution truly shines. Acquisitions are an area of high demand, said Polito.
Perhaps it’s a case of a mom-and-pop business where the owners want to retire. Do they sell the company to their employees? To one or all of their children? Or to someone else in the market for a business like theirs? This is where Polito and his team of eight SBA professionals — representing about a century’s worth of combined experience — offer insight and wisdom customized to that buyer or seller’s particular situation.
“We have a reputation in the field as the bank to go to for acquisitions,” said Polito. It’s a reputation that has grown organically over time, fueled by widespread referrals and cycles of happy clients.
The SBA loan product, requiring only 10 percent down, is a great tool in the acquisition mix. Polito is adamant that the correct pieces must be in place from a business perspective to foster a successful acquisition for a business that will continue to thrive and grow. He and his team look at a transaction from every angle.
“I rely very heavily on the resume of the buyer,” he said. “Is it the right experience, the right buyers, the right team?”
The Webster Bank advantage lies not only in its reputation as an acquisition SBA advisor and lender, but also in what it brings to the table in terms of its network — attorneys, certified public accountants, financial planners and industry specialists, to name a few. Its small-business clients can get advice customized to their field and their particular situation.
Polito is an advocate of small-business owners setting up relationships with SBA professional lenders early — even before they are ready to sell or buy. “It’s good to establish a banking relationship before you need it,” he advises. “It’s a great idea. Introduce me to your attorney and CPA.” When the time comes to make a transition, the team is already assembled, but more importantly, members already know the business owner’s values, goals and ways of doing business.
Learning commitment
Webster Bank keeps abreast of regular SBA Standard Operating Procedure (SOP) changes.
These changes can include things like what life insurance is required for a business owner; loan eligibility criteria; or borrower contribution for special-use properties, such as gas stations.
An SBA-lending professional that is not up on the latest SOP changes could cost a small-business owner an opportunity. It’s just that simple, said Polito. So his team does not slack in its professional development in this area. SOP-change webinars and seminars are part of the normal mix of information for the Webster Bank SBA lending team.
“The team is very willing and hungry to understand those changes,” such as the ones that went into effect at the start of 2019, he said. “Most competitors won’t read it for six months, but we know what is allowed.”
This up-to-date SOP knowledge dovetails with the bank’s strong relationships with SBA clients, Webster’s superior network of professional specialists, and its robust SBA-lending book of business.
All these factors allow Webster Bank to provide SBA clients with loans that best suit their success — contributing to Connecticut’s economic success overall.
