Bank of America exec sees positive momentum

Posted: July 02, 2013

Robb Hilson's job as head of small-business banking at Bank of America is to convince entrepreneurs that the bank wants to do business with them.

That's not easy when, in surveys, small businesses consistently report that they find it hard to get loans from banks, and when, since the recession, banks have become more cautious about lending to smaller companies.

But in the 18 months Hilson has been on the job at the nation's second-largest bank, it has had some success with its 3.2 million small-business customers. Last year, Bank of America made $8.7 billion in new loans to small businesses, up 28 percent from 2011.

"I feel really good about the momentum," Hilson said. "There's obviously more work to do, but we've made a lot of progress."

Hilson, 54, took the job in November 2011, soon after Bank of America started placing 1,000 bankers in cities and communities around the country to serve small companies. Bank of America and other big banks began bolstering their outreach after they were criticized for stringent lending standards that prevented many ventures from getting loans.

Bank of America also was among the banks that pledged to the Small Business Administration that it would increase loans to small business.

"It's a different conversation with small-business owners," Hilson said. "So many of these folks are wearing a bunch of hats. It's just a different environment than meeting with the CEO."

Following are excerpts from a recent interview.

Question: Suppose a business owner doesn't qualify for a loan? What do you do?

Answer: We would give them a pretty good sense of what it would need for them to look like for them to qualify. But we also work with some nonprofit organizations in the community that might be able to work with them. Community development financial institutions - these are by and large nonprofit financial institutions, and we've been one of the biggest supporters of these. They're smaller organizations that aren't subject to the same regulations as Federal Deposit Insurance Corp. banks.

We extended a $110 million grant a couple of years ago to some CDFIs that turned around and leveraged that . . . to more than $100 million they could then invest or lend directly to small businesses. If we're not able to help a client today . . . there are other opportunities for us to help them . . . improve their cash flow by helping them collect payments, for instance.

Q: What results are you seeing from the 1,000 bankers you've placed around the country?

A: We're excited we were up 28 percent in new-loan originations in 2012 over 2011. And through the first four months of this year, we're ahead of that pace.

We know that the bankers are focused on credit, but they're also focusing on delivering all of our capabilities . . . pairing up with financial-solutions advisers who will work with small businesses on the personal side - investing solutions, preparing small-business owners for retirement, or for taking care of their children's education.

Q: Why are your biggest opportunities with existing customers?

A: A number of clients might consider us to be their lead bank, but it's primarily through basic checking and cash management with us. They don't necessarily have any borrowing with us. They might have a credit card, but they don't have a term loan or a building on their property. Or they might have all of that business with us, but they're not a client of Merrill Lynch. We have a great opportunity on the investing side of the house.

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