NORWICH — An executive in charge of commercial banking at NBT Bank wants small-business owners to know financing is available to help them expand. “One of the frustrating things that’s been in the press as of late is banks aren’t lending money,” says Jeffrey Levy, NBT’s president of commercial banking. “We are all — not […]
NORWICH — An executive in charge of commercial banking at NBT Bank wants small-business owners to know financing is available to help them expand.
“One of the frustrating things that’s been in the press as of late is banks aren’t lending money,” says Jeffrey Levy, NBT’s president of commercial banking. “We are all — not just NBT, all of our competitors — we are all anxious to lend money.”
Levy points to NBT’s lending totals under U.S. Small Business Administration (SBA) programs to underscore his bank’s commitment to lending. NBT was the top large community lender in Central New York, the Southern Tier, and throughout the SBA’s Syracuse district in the 2012 fiscal year, according to data the agency released in October.
NBT approved 20 loans totaling $2.3 million in Central New York under the SBA’s 7(a) program. It made 25 loans for $3.3 million in the Southern Tier.
Throughout the 34-county SBA Syracuse district, the bank made 70 loans totaling $10 million. The SBA’s Syracuse district includes Central New York, the Southern Tier, the North Country, and the Capital Region.
NBT trailed only M&T Bank in 7(a) loan approvals in the Syracuse district. M&T, which falls under the SBA’s large commercial lender category, made 166 loans for nearly $17.6 million in the 2012 fiscal year.
The 7(a) program has the SBA guarantee loans from financial institutions to help finance a range of general business purposes. The SBA also has an initiative known as the 504 loan program, which can be used for fixed assets like purchasing buildings or land and for building new facilities.
NBT lends through the 504 program as well. It approved 11 loans totaling nearly $11.3 million in the SBA’s 2012 fiscal year in the Syracuse district. Again, that was second in the district behind M&T Bank. M&T approved 12 loans for $28.5 million in the district during the fiscal year.
NBT’s high rate of SBA lending comes after the bank made moves to increase its work with government-sponsored lending programs through the SBA and other agencies like the U.S. Department of Agriculture and the U.S. Farm Service Agency, Levy says. It started a specialized unit for that purpose about three years ago, he continues.
“The government absorbs the risk,” Levy says. “The 7(a) is probably the most widely utilized SBA program. For the small businessperson who is starting a business or doesn’t have a lot of capital, the 7(a) program provides the bank with the opportunity to make a loan that you might not make without the guarantee.”
The SBA has also streamlined the process for small businesses to apply for loans it backs, Levy adds. He contends that helped NBT increase its lending under the administration’s programs.
Statistics on SBA lending show NBT’s focus on working with small businesses, but the bank doesn’t limit its efforts to government-backed programs, according to Levy. He estimates NBT produced more than $400 million in new loans in 2012.
“The vast majority of our business is small businesses,” Levy says. “The backbone of the USA and the backbone of Upstate is small business.”
Levy expects NBT’s small-business lending to grow once the bank completes an acquisition of Syracuse–based Alliance Financial Corp. (NASDAQ: ALNC). NBT Bank’s Norwich–based parent, NBT Bancorp, Inc. (NASDAQ: NBTB), revealed plans in October to purchase Alliance in a deal worth more than $233 million. That transaction is expected to close early in 2013.
However, Levy declines to name a specific target for small-business lending going forward.
“It’s still a very, very personal relationship,” he says. “It’s local people working for the local banks, providing not just lending advice but support to the small businesses. We’re going to become a much more prominent lender in the greater Syracuse area.”
However, Levy offers a word of advice for anyone looking for a commercial loan.
“Do a business plan,” he says. “Most people come into the bank and say, ‘I want to borrow X dollars and here’s my idea.’ Well, their idea is great, but they need to document their idea. They need to provide some historical information. Everybody has an idea, but you have to be able to put together a plan on paper that someone else can read and buy into.”
Levy recommended small-business owners seeking help turn to Small Business Development Centers or SCORE counseling, which has experienced executives and entrepreneurs providing business advice.
NBT has 135 branches in New York, Pennsylvania, Vermont, Massachusetts, and New Hampshire. Its assets total $6 billion, and it also owns a 401(k) record-keeping firm and an insurance agency.
Contact Seltzer at rseltzer@cnybj.com