Neil Pierson is editor of Scotsman Guide Commercial Edition.
Reach him at (800) 297-6061 or firstname.lastname@example.org.
Bill Manger is the associate administrator for the Office of Capital Access
at the U. S. Small Business Administration. Manger is responsible for SBA’s
loan-program policies, technology,
operations and oversight, including
its 7(a), CDC/504, microloan and
surety-bond programs. Manger manages a $120 billion portfolio of direct
and guaranteed loans. He came to
SBA in 2005 as a regional administrator based in New York City. Manger
has a master’s degree in business
administration from Columbia
Dianna Seaborn is the director of
the Office of Financial Assistance
at the U.S. Small Business Administration. She oversees program and
policy development for SBA’s flagship
7(a) and CDC/504 loan programs.
Seaborn joined the SBA in 2008 after
spending 24 years in private-sector
small business and commercial
finance. Prior to her SBA tenure, she
was an executive at several high-volume, SBA-participant lending and
Associate administrator, Office of Capital Access
U.S. Small Business Administration
Director, Office of Financial Assistance
U.S. Small Business Administration
By Neil Pierson
keep the economy humming
If you’re starting a new business, it can be difficult to open your doors without access to upfront cash. The same
holds true if you’re upgrading a business and looking to buy or acquire commercial real estate as part of that, whether you’re a general contractor with a $20 million annual budget or a car dealership with 100 employees. In each case,
you may meet the basic standards to qualify for a loan through the U.S. Small Business Administration (SBA).
Bill Manger, associate administrator with SBA’s Office of Capital Access; and Dianna Seaborn, director of the SBA’s
Office of Financial Assistance, spoke with Scotsman Guide about the agency’s loan programs, their usefulness in
today’s business climate, and what mortgage brokers and borrowers should know in order to utilize them.
How useful are SBA loans in today’s business climate and are there issues in the economy driving
entrepreneurs toward them?
Manger: We think that the program is extremely useful in today’s climate. Although the economy is improving
and things seem to be going along quite well now, there are still those small-business owners and entrepreneurs
out there that have a tough time getting capital. … That’s where the SBA comes in, because by mitigating the
risk to a lender, they’re willing to make the loan to someone who wants to do a start-up, or someone who wants
to open a restaurant.
Seaborn: We’re coming off the longest protracted recession we’ve had, maybe ever, and the leader in that
recovery is usually big business. … When the economy has challenges, the [SBA] sees robust growth and usage,
and that’s because the last point of recovery in our economy, from a business standpoint, are the people that we
serve — those that can’t repay a loan in three years under a conventional line or have less capital in their pocket
to be able to invest. We have had a long period of growth during this recession. We see that our portfolio now
is 35 to 40 percent loans that are under $350,000.
Are there specific areas of the country that utilize these loans more than others, and are there reasons
Seaborn: We have a very large population of lenders along the West Coast, areas of the Southeast and some areas
of the upper Mid-Atlantic. So, part of it is driven by where the lenders are who have accepted and understand the
program, and decide to participate. … When you look at the southern tier of business, you see that there is a lot
of small-business activity, and a lot of retirees and people who are displaced, that move south to open businesses.
What is the SBA community advantage loan, and why would a business look to obtain one?
Manger: The community advantage program is actually still in the pilot phase. It was started in about 2011 and it
runs through 2020. We will be looking at it in the next year or two to see whether it should be made permanent,
but it was specifically structured to make smaller loans — $250,000 is the largest size that can be made under the
community advantage program. The average size of our community advantage loans is $130,000. … It’s suggested that someone who gets one of these loans gets some technical assistance to help build out their business.
It’s not required but it’s recommended.
Are there features or purposes of SBA loans that mortgage brokers or borrowers could better understand?
Seaborn: Probably the biggest misunderstanding … is that we’re not a direct-lending program. The actual
borrower goes to a bank and says, ‘Look, I have a business or a business idea, and I need a business loan,’ and
the bank walks them through the process of making the determination as to what kind of credit, if any, that they
need. I think that level of communication is always a challenge. One of the things that we try to do … is to provide
greater guidance and advocacy touch points on our website for entrepreneurs and borrowers.
Manger: We’re still trying to recruit more lenders, especially at the community-bank level and the regional level,
because there are certain rural communities where our program can do very well. But we need to have our
partners in those areas to support the program and to utilize it. n