Lee is Lending 2014

HISTORY

Lee is Lending was started in 2010 as a way to connect the local banking community with qualified

businesses seeking loans. During the economic downturn, the prevailing view within the business

community was that banks were not lending money, particularly to small businesses. While regulators

had tightened the regulatory environment, banks still had funds to lend.

During a meeting with the EDO’s banking consortium, the consensus among the bankers was that media

reports combined with the generally negative outlook of business owners had resulted in business

owners not even attempting to seek a loan from the banks. Discussions also covered the fact that each

bank had unique portfolios and underwriting criteria that may or may not fit each applicant. Some

banks were able to make loans that a competitor could not, and vice versa. National banks offered

different services than community banks or regional banks.

In response to the feedback from the business community and the bankers, the EDO in partnership with

the Lee County IDA developed a marketing program called Lee is Lending to connect qualified

businesses with banks. The approach was to have a comprehensive list of local banks with a designated

representative to guide Lee is Lending referrals.

GOALS AND OBJECTIVES

The Lee is Lending program is designed to open lines of communication between the small business

community, the Lee County Economic Development Office, and the lending community. As businesses

contact the EDO for referral to the Banking Network through the program, the process is designed to

gain a better understanding of the financial needs of the applicants. This program should enable the

EDO to better identify growing companies as well as businesses that are facing challenges. The Lee is

Lending program will also give the EDO a tool to support small businesses across industry sectors.

2014 PROPOSAL

Upon review of the program, several opportunities for improvement were realized. While the number

of inquiries was higher than expected, measurement of outcomes was lacking. Once businesses were

referred to the banks or the SBDC and SCORE, reporting and follow-up was sporadic.

EDO staff met with selected bankers to determine if there was still a need for the Lee is Lending

program. The bankers all agreed that the program still had merit. They felt that many businesses still

have the impression that banks are not lending or don’t want to lend. The bankers also felt that the

program was a good tool for raising awareness of the different types of local banks. It was also felt that

even businesses that did not qualify for specific loan programs benefitted from some of the other

offerings that the banks have. Some businesses are looking for loans when they may need a different

financial product or service. Many of the bankers shared that they work with businesses that don’t

qualify to improve their credit scores and prepare them for success at a later date. The EDO staff felt

that they should expand their role in the program to a more “case management” approach.

PROGRAM ENHANCEMENTS

EDO staff will meet with each business that wants to participate in the Lee is Lending program.

o Obtain contact information

o Perform initial screening

Does the business owner know credit score?

Identify possible barriers to obtaining a loan. (make a basic list of red flags)

Determine if the business owner has a current business plan.

Why do they need funds? Does the EDO have programs that can help, i.e.

Enterprise Zone, training grants, manufacturing tax refunds.

Businesses that need assistance from SBDC or SCORE will be referred through a scheduled

appointment with EDO staff in attendance.

Referrals to the banks will be made directly by the EDO rather than simply having the business

owner call. EDO will follow-up with the banking partner within 1 week for an update of the

meeting

o The EDO will refer the business owner to his existing banker first.

o If the business owner does not have an existing banking relationship, EDO staff will ask

the business owner to review the list and choose 3 banks for referral.

o Banking partners agree to allow the EDO to refer the business client to other Lee is

Lending partners should they not be able to assist the client on the specific project.

Hold quarterly meetings with the EDO and the banking partners to insure that contact

information is correct for the banks and to facilitate improvements in the program.

EDO staff will meet with businesses regularly for data collection to monitor the success of the

program and to identify additional resources that may be needed. These needs may be for

operational issues once funding is received or for further referrals within the program (either

banks, or SBDC/SCORE).

EDO staff will work with the banking partners and the IDA to identify a more formal toolkit and

criteria for loan assistance.

EDO will provide marketing support for the program/host Lee is Lending website, other

promotion.

EDO will provide reporting to the IDA

o Number of companies responding to the program

o Number referred to SBDC/SCORE

o Number referred to bank partners

o Number of loans made to companies referred

o Other assistance provided to companies, such as Enterprise Zone assistance

EDO ROLE

Host website to serve as a portal for the program, including list of participating banks.

Develop an advertising campaign to raise awareness of the program and the willingness of

banks to loan money.

Provide initial intake of inquiries and perform basic pre-screening to determine if the business

owner is prepared for the loan process, i.e. do they know their credit score, do they have a

current business plan, and have they approached their existing banker?

Refer businesses that do not have a reasonable chance of success with the bank to the SBDC and

the local SCORE chapter for assistance and business counseling.

Refer reasonably qualified businesses to the bankers list.

BANK ROLE

Sign Partnership agreement designating a point person for the program

Report monthly on the number of inquiries and/or loans approved as a result of the program.

To the best of their ability, provide information to the EDO to assist with the preliminary

screening of businesses.

IDA ROLE

Work with banks that have loans on the cusp of approval to provide assistance in helping the

business qualify for the loan.

o The assistance tools were not specified to provide flexibility on a case by case basis to

meet the unique needs of each application.

o Tools discussed included small grants and loan guarantees.