Jon Chesto reports at the Patriot Ledger that Eastern Bank has edged out perennial leader Citizens Bank as the state’s top Small Business Administration lender based on loan volume.
Boston-based Eastern, the state’s fifth largest retail bank, originated 156 SBA-backed loans in the fiscal year that ended Sept. 30, totaling $7.3 million, including 28 loans totaling $1.6 million on the South Shore. Eastern easily topped Providence-based Citizens’ 130 SBA-backed loans, although Citizens loaned nearly $7.9 million.
Meanwhile, TD Bank loaned the most money through SBA-backed loans, lending $10.4 million, but those funds were spread among only 35 loans.
The SBA designation is a notable victory for Eastern, which was ranked ninth by volume last year, over a much larger bank that typically dominates SBA lending in the state.
“We respect the work that Citizens has done,” said Bob Rivers, Eastern’s president. “They have many more branches than we do. They have more people on the street than we do.”
Rivers said his bank has taken several steps to ramp up its small-business lending activities. Eastern doubled the size of its business banking staff from seven people in 2007 to 15 in 2008, Rivers said. Rivers said the bank also encouraged branch managers to reach out to small businesses in their respective communities, and the bank hired its first SBA specialist.
“There’s a wide perception out there that banks aren’t lending,” Rivers said. “I think this makes a pretty strong statement that certainly at Eastern, we are lending and trying to do our best to give small businesses every opportunity to succeed in these challenging times.”
David Lu, owner of an information technology consulting firm with an office in Dorchester, said he obtained an SBA-backed line of credit for $50,000 from Eastern in about two weeks. He said he was impressed with how easy it was to obtain the credit line last month.
“They were very friendly, very knowledgeable,” Lu, president of The United Group Corp., said of Eastern’s staff. “They understand small businesses like my business. … I talked to some big banks, and they said your revenue has to be a certain size.”
The SBA program provides a guarantee for a portion of an SBA-backed loan, significantly reducing the risk for the bank issuing the loan. Such guarantees can be crucial for entrepreneurs whose businesses don’t have a long track record.