At a time when many financial institutions are pulling back on their small business lending, one bank decided the time is right to jump in.
Wedbush Bank, an L.A. institution that opened just over a year ago, announced this month that it has opened a Small Business Administration division to make loans backed by the government agency.
"We're taking advantage of a time when other banks are moving out of it," said R. Scott Racusin, chief executive of the bank. "It's a very viable form of lending going forward. Our desire is to make and hold these loans, not necessarily sell them into the secondary market."
Indeed, the inability of banks to sell the loans into the secondary market has led many institutions to drastically reduce their small business lending. As of the end of February, SBA lending in Southern California had fallen 60 percent from the previous year.
The division will be headed by Justin Moon, who has managed SBA divisions for other banks. He and the four other members of the team came from Alliance Bank, the Culver City institution that in February was seized by federal regulators and sold to California Bank & Trust in San Diego.
Racusin and Moon said another impetus for the creation of the division was the recent action taken by the Obama administration to bolster the struggling sector. The government recently moved to increase the guarantee on SBA loans to as much as 90 percent and help eliminate fees related to the loans.
"Adding the additional guarantee will give the bank a better comfort level," said Moon, who hopes to make at least 25 SBA loans during the remainder of 2009 for a total value of $15 million or more.
The bank is currently working with customers and ramping up its marketing efforts to stimulate interest in the new division. Ultimately, Moon said he hopes to turn the young bank into one of the area's top SBA lenders.
"Coming from an SBA background, I think it is an excellent program," he said.
Several business groups in the San Fernando Valley have teamed up to help promote investment in the area's "green technology" industry at a time when investment in the sector is cooling along with the overall economy.
Through the Valley Green Agenda a coalition of the Valley Economic Alliance, Valley Economic Development Center and Valley Industry and Commerce Association business leaders plan to highlight new environmentally focused companies and help connect entrepreneurs in the field with investors. The coalition also hopes to make it easier for the businesses to get loans. Among the ventures the group expects to support are waste management and alternative energy companies.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- New Bank Bucks Loan Sector Trend
- Aggressive Lenders Redrawing SBA Turf
- SBA Loans Evaporate for Area Firms
- Holding Companies Banking on Rescue Funding
- Small Biz Finally Gets Some Credit From Banks
- LOANS---Bank of America Slashes SBA Loans
- Businesses in Crunch as SBA Lender Closes
- Small-Business Loans Make a Big Comeback in L.A.