Independent Banker - May 2023 - 44

" The key is that
SBA is a credit
enhancer; it's not
a credit mitigant.
So, it doesn't make
a bad loan good,
but it does make
a good loan better. "
-RANDY VICKNAIR,
FIRST GUARANTY BANK
It's already getting tougher to
qualify small business clients in
the rising-rate environment, notes
Rouse. " With higher interest rates,
there will be fewer opportunities on
the table for businesses to access
credit, and borrowing will be that
much more expensive, " he says.
Banks are going to look at SBA
as a " safer play " in the lending
arena, because they do get that
government guarantee, adds
Vicknair. He also anticipates strong
borrower demand in 2023 going
into 2024, both from customers
who may be facing greater
challenges and those who see
opportunities for growth.
" When there is uncertainty
and unknowns, that is sometimes
when you can do really well in the
business world, " he says, " and I
think there are going to be a lot
of people who want to seize that
opportunity and will need to go the
SBA route to do so. "
Making " good " loans
The basic premise behind the SBA
loan programs is that to qualify for an
SBA loan, credit cannot be available
elsewhere on reasonable terms for
that small business. " So, a lot of SBA
lending comes down to threading that
needle, " says Murphy.
Sometimes, borrowers are
technically too strong for an SBA loan,
and they really should be getting a
conventional loan. On the flip side,
when a lender is trying to qualify a
small business for a conventional
loan, these small businesses don't fit
into that conventional box very easily,
according to Murphy.
However, SBA lending can be
intimidating and complex. The SBA's
rulebook-the Standard Operating
Procedure (SOP) describing eligibility
requirements, policies and procedures
for the 7(a) and 504 programs-
spans more than 400 pages. " When
conventional lenders hear SBA, they
get nervous, because they immediately
think it is complicated and there is a lot
of nuance to it, but everything you need
to know is right there in the SOP, " says
Vicknair. " It's just a matter of doing the
research to find the answers. "
First Guaranty Bank also goes to the
SBA directly through its email help
system, as well as local agents.
" The biggest challenge from our
perspective is making sure we identify
the proper opportunities for the bank, "
Vicknair says.
" There are going to be a lot more
opportunities in 2023, but not all
of them are going to be loans that
Left: Annemarie Murphy, executive vice
president and president of SBA (back row,
far right), and other employees of First
Bank of the Lake. The community bank rose
to became a top 20 lender in the U.S. and
originated $306 million in SBA loans in 2022.
44 // ICBA Independent Banker // May 2023

Independent Banker - May 2023

Table of Contents for the Digital Edition of Independent Banker - May 2023

Content
Independent Banker - May 2023 - Cover1
Independent Banker - May 2023 - Cover2
Independent Banker - May 2023 - Content
Independent Banker - May 2023 - 2
Independent Banker - May 2023 - 3
Independent Banker - May 2023 - 4
Independent Banker - May 2023 - 5
Independent Banker - May 2023 - 6
Independent Banker - May 2023 - 7
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