Depending on who you ask, the new Bank of America Small Business Lending Program is either the savior of small business owners around the nation or another good idea that got lost in the logistics. Either way, the banking giant announced it had met its target of hiring 1,000 small business bankers while also deploying close to $9 billion of new credit to small business owners in 2012, which equates to a 28 percent increase from 2011.
With the creation of the small business banker role, Bank of America responded directly to what our clients asked for – locally based small business experts who provide small businesses with the financial solutions necessary to sustain and grow their business,
said Robb Hilson, small business executive for Bank of America. He also reiterated the bank’s commitment of ensuring new credit and making available local ‘expertise’ to small business owners in the coming year.
Small Business Banker
So what exactly is the role of small business banker? Specifically, Bank of America says small business bankers are the ones “in the field” and who are providing specific and personalized attention to these business owners in their communities. By gaining new insight into the companies, they’re better able to help them secure the financial tools necessary for growing their business. Those tools might include business credit cards, investment opportunities and better business checking accounts. It’s all about providing a seamless total package that’s both versatile and realistic in its offerings.
Another Bank of America spokesperson, Anna Colton, said close to 70 percent of business owners are looking for financial experts who can come into the business and provide that unique insight. Colton said through this new program, its small business bankers will put those opportunities into place “by investing time and developing a relationship…” with the small business owners. It’s an aggressive approach and if it’s successful, it could change the way bankers approach their business clients moving forward.
BoA has also expanded its online services to these companies with additional chat employees who stand ready to provide assistance as well as its recent launch of the Small Business Community website, where thousands of small business owners come together to share ideas and resources. Those resources might include networking between similar companies that have found better pricing on material or equipment. It could also include providing feedback on various financial products.
It’s also revamped its core offerings for business owners, known as the “Business Fundamentals and Business Advantage”, which was designed to allow versatility for a business owner to choose the best products and services that will meet their needs. Fee waivers and rewards programs are part of its business credit card offerings, too. While it may seem as though these benefits are minimal, the fact is, it’s a revolutionary approach and when one takes a look at the big picture, it becomes clear it’s about far more than the waiving of a fee or two.
You may recall that several of the nation’s big banks recently partnered with the Small Business Administration as well the White House. A total of thirteen banks came together to increase small business loans by a total of $20 billion this year. Bank of America reins supreme when it comes to lending for smaller companies – it offers more than the other banks and it’s also a big supporter of Community Development Financial Institutions. It’s released more than $200 million in funds for CFDIs which do not qualify for traditional business loans or credit cards. This federal grant was put into place to fund micro capital loans. The domino effect resulted in more than 15,000 new jobs and financing opportunities for more than 10,000 companies around the nation. This also played a role in the 28% jump in business lending from 2011 to 2012.
There has been some criticism of these efforts, though. Specifically, many are questioning how Bank of America defines small business. The Small Business Administration defines a business that employs fewer than 500 people and has annual revenues of less than $7 million. That said, depending on the industry, those numbers can become a bit fuzzy – especially considering that in some industries, a small business could have $30 million in revenues and 2,000 employees – and it also means that the bank could have showed some type of favoritism for these larger companies.
Then there are those who say the bank’s numbers are skewered since they’re including in the financial totals lines of credit extended via credit cards. Many say a business credit card is not actually a loan in the traditional sense and it shouldn’t be included in those impressive numbers the bank is proffering.
So now, there are questions being asked about how much of the monies were given to true small businesses and how much is being counted as lines of credit on business cards.
Then, there are those who say the criticism is unfair. Regardless of whether the funding comes in the form of cash or a credit card, the bottom line is that small business owners are getting the tools they need to sustain them and ultimately help them grow their companies, which, of course, is always a good thing for the economy. Credit cards aren’t the enemy; in fact, for millions of small business owners, they serve as ideal financial tools. Bottom line, in a tough economic recovery, any advantage is one any business owner – big or small – should consider.
Bank of America boasts 53 million customers, 3 million of which are small business owners. Those business consumers have relied on the bank for a number of products and services for years, including bank accounts, credit card accounts, asset management, investing and risk management. With more than 5,500 offices around the nation, it’s only natural smaller companies would opt for the power that comes with a big bank. Bank of America has met that challenge and continues to do so with this initiative.
Are you a small business owner? Have you considered the Bank of America offering of a small business banker or does it feel too invasive? Share your thoughts with us in the comments section or join the conversation on Facebook.
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