Empowering Small, Women, and Minority-Owned Businesses Through Access to Capital
This response update addresses the essential need for small, women-owned, and minority-owned businesses to access capital. The strategies presented include offering loans to small businesses and child care providers, attracting businesses to EDA/IDA projects, assisting in securing bank loans, and encouraging investors to support small businesses. The update also highlights Howard F. Pisons' extensive background in banking and business management, as well as the recent organizational developments within the VSBFA. Additionally, it outlines the status update on implementing recommendations from the JLARC report of August 2020, particularly focusing on setting annual utilization goals for VSBFA programs.
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Presentation Transcript
Minority Business Commission JLARC Report - Response Update Presented by: Howard F. Pisons, Executive Director September 27, 2021
Adress the fundamental need for small, women owned and minority owned businesses to obtain access to capital HOW: Offer loans to small businesses and child care providers Offer loans to small businesses in EDA/IDA projects to attract or retain them Help small businesses obtain loans from banks Incentivize investors to invest in small businesses
Howard F. Pisons Joined VSBFA 9/30/2019 36 years of prior business and banking know how 16 years Community Bankers Bank (Richmond, VA 2002-2018) 16 years National Banks (Chicago, IL 1984-2000) 4 years Multinational Corporations (CA, IL 1980-84)
ORGANIZATION New Positions added this year! Accounting and Operations Manager SSBCI Grant Manager VSBFA Executive Director Executive Assistant Open Positions filled this year Executive Assistant Accounting and Operations Manager Chief Credit Officer SSBCI Grant Manager Sales Team Open Positions (in process) Regional Lending Manager Loan Accounting and Operations Specialist Regional Lending Manager Portfolio Specialist (TBD) Grant Specialist (TBD) Future Positions (on the drawing board) Sales Team Manager Loan Administration Specialist Portfolio Specialist Grant Specialist Loan Accounting and Operations Specialist Regional Lending Manager Loan Regional Lending Manager Administration Specialist (TBD)
Recommendation 6: Set annual utilization goals for each program 90% utilization target Goals are uniquely tied to each program type, economic and lending environment, capacity and resources Strategies to establish annual goals and increase utilization for each VSBFA program is under development. Steps underway: Resource capacity assessment (underway/finalize with Oct EWP process) Add capacity Fill regional lending manager position (underway/finalize Oct) Increase Borrowing limits (underway/finalize 10/12) Decrease Borrowing costs (complete) Develop New products (on-going) Amplify Awareness Webinars, social media, website (planning phase) Amplify Awareness SBM, MBL, AWBO, VBA, SBDC, RFBR (on-going leveraging partnerships)
Recommendation 7: Regularly track utilization and report to the Board annually A Dashboard to report program utilization was accepted by the Board on 4/13/2021 The Dashboard will evolve with other key success drivers for reporting to the Board The Dashboard is presented to the Board quarterly; next due 10/12/2021
Recommendation 8: Develop policies and risk standards that reflect the public mission for Board approval A comprehensive Credit Policy Manual ( Policy ) was presented to the Board on 9/14/2021 for review Additional review will be conducted on 10/12/2021 to approve the Policy The Policy will be updated and approved annually by the Board The Policy is comprehensive and responds to JLARC recommendations: #9, #10, #11 and #12
Recommendation 9: Develop a risk assessment tool for Board approval A loan Risk Rating System (RRS) was developed and accepted by the Board on 4/13/2021 The RRS is a component of the Policy which will be reviewed and approved by the Board annually The loan portfolio has been risk rated and is being managed accordingly
Recommendation 10: Conduct a risk based review and report finding to the Board at least annually All program transactions have been risk rated according to Policy Annual transaction reviews will be performed according to Policy; risk ratings will be assessed and updated at that time Transactions risk rated Substandard (6) or worse will be reviewed with the Board quarterly A risk assessment summary of the total portfolio will be reported to the Board annually
Recommendation 11: Require banks to report high risk loans in the formal agreements High risk loans are primarily bank loans in our guaranty programs How we mitigate: Policy requires us to underwrite and monitor them like we are the lender Subject to annual review according to Policy Subject to quarterly review if we risk rate them Special Mention or worse Will set monitoring expectations with banks accordingly Our transaction agreements currently require banks to notify us of any material adverse change(s) in the credit
Recommendation 12: Establish timeframes to process loans; track and report results Established turnaround standards for transaction screening, underwriting and approval Timeframes are based on controllable actions (screening, underwriting, approval) Timeframes begin when the requested information and answers are received for each processing stage and recorded Timeframe standards are goals in the Employee Work Plan
Recommendation 12: Identify Timeframes for Application Process W1 W2 W3 D1 D2 D3 D4 D6 D7 D8 D9 D11 D12 D13 D14 D5 D10 D15 Application RLM Screening - 2 days CCO Screened Underwriting - 2 days Microloan & Child Care CCO Review/Approve Approved Underwriting - 5 day EDLF, CCP & LGP CCO Review / Approve Approved
Recommendation 14: Establish a program improvement plan to address report deficiencies Account to the board quarterly, annually and as needed Adhere to Credit Policy; establish new policies and procedures as warranted Fill open Regional Lending Manager position Continue to right size the organization Develop annual program utilization goals (#6)
PIVOT - Post State of Emergency Organization Fill open positions (in-process/finalize Oct); right size staff (on-going) Upgrade Financial & accounting, grant management, loan operating systems (separate-stages) Upgrade Salesforce (Go-Live 10/4) (track all aspects of goal and process management) Upgrade DocuSign (Go-Live 11/30) (all program documentation) Upgrade Public Relations and Marketing Manager (complete) Amplify Awareness Social media, website, webinars (planning phase) Amplify Awareness SBM, MBL, AWBO, VBA, RFBR, SBDC (on-going - leveraging partnerships) Increase Borrowing limits (partially complete/finalize 10/12) Decrease Borrowing costs (complete) Develop New products (in-process)
Rebuild VA Grant Program $120 Million (2020) / $25 Million (2021) Program to Date as of 9/22/2021: Total Amount Awarded Total Grants Awarded Average Grant Award Low Income Community Awards (58.44%) Minority Awards (31.99%) Woman Owned Awards (32.12%) Applications in the Pipeline $139,239,908 3,474 $40,081 $81,371,632 $44,540,008 $44,727,223 9,000
Grant Award Map Interactive map available at: https://www.governor.virginia.gov/rebuildva/
On the Horizon $250 Million Rebuild VA Grant Program (Imminent) $188 Million State Small Business Credit Initiative(Q1 2022)
Questions? Howard F. Pisons Angela M. Reese Howard.Pisons@sbsd.virginia.gov Angela.Reese@sbsd.virginia.gov www.sbsd.virginia.gov www.sbsd.virginia.gov Executive Director Executive Assistant
