A Small Business Loan Is Not a Pipe Dream

3 min read • Apr 18, 2014 • Ty Kiisel

First thing this morning there were two or three messages on our customer service line complimenting us on our blog content and the information we regularly try to share about running a small business and how to overcome the challenges associated with accessing capital. One of my colleagues commented on the positive messages to which I replied (because of the nature of the comments and the channel they came through), “You know they’re probably SPAM.”

He chided me and suggested I should accept the compliment from him—and whomever the praise was from.

We often talk about the challenges and pitfalls of running a business or the difficulties in finding financing, but not today. I’d like to talk about one of my favorite small business bankers and what she and her bank are doing to put capital into the hands of small business owners.

Tracy Flynn and Holladay Bank & Trust are great examples of what one small community bank is doing to help small businesses in their community. The are one of the traditional small business lenders on the Lendio platform, but that’s not the reason I’m writing about them.

They don’t have a large national presence, a substantive regional presence, or even multiple branches throughout a large metroplex—they are a one-branch bank in a relatively small community. For 40 or so years, they’ve focused on real estate-backed small business lending and are well respected for their expertise. Recently they’ve started participating in the SBA’s 7(a) small business loan program, which has introduced them to a number of new borrowers.

“We work with a lot of small business owners who have good, healthy businesses, but aren’t perfect,” she says. “They might not meet the restrictive standard of norms and requirements set by the bigger small business lenders in our area, but have proven to be great small business loan customers.”

Having spent most of my 30+ year career in one Main Street business or another (one or two have even been my own businesses), I’ve noticed that most Main Street business owners aren’t finance majors and aren’t experts in funding their small businesses. They might even make mistakes and are often compelled to make compromises to keep the doors open. Robbing Peter this month to pay Paul can take its toll on a small business’ creditworthiness if it’s a pattern.

I know doing the books was one of my least favorite things and often got put off until all the rest of the business of the day was complete, which was sometimes problematic. I think that’s what Flynn is talking about when she acknowledges that some very healthy businesses have less-than-perfect business owners.

In addition to a P&L, annual revenues, cash flow, and credit scores, Holladay Bank digs a little deeper to better understand their small business loan customers. They look at the management team, are they current with their monthly obligations, do they have a good product, are they competing well within the market? Sometimes these indicators can help mitigate a weak credit score.

Of course there’s a credit threshold they won’t go below, but knowing more about the businesses in their community enables them to look beyond the “numbers” when evaluating a potential small business loan. Which, by the way, happens within the walls of their single branch office.

The way Holladay Bank and Flynn approach the small business market reminds me of what it was like earlier in my career. I think I took the wonderful relationship we had with our banker for granted because I didn’t appreciate how rare he was. When I asked Flynn if there were other community bankers like her out there she said, “There are lots of us all around the country. You just need to look for them.”


Ty Kiisel

Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon.