Who’s Who in Finance: Hollywood to Main Street

Downtown-based City National Bank, known for its specialized banking services to high-net-worth clients and the entertainment industry, knows it can’t only be the “bank to the stars.”

The Royal Bank of Canada subsidiary has in recent years made moves to expand beyond its longstanding Hollywood niche, reaching into new geographies and corporate client bases. Lending to small businesses is one piece of that puzzle.

From actively participating in the pandemic-time federal Paycheck Protection Program to becoming the nation’s second-largest 504 lender in 2022, City National has waded deep into SBA. 

Sam Benedum, who leads City National’s business banking division, unpacked the lender’s SBA strategy and outlook in a recent conversation with the Business Journal. 

Are there any trends or new directions that you have been seeing in SBA lending in L.A.? How would you describe the landscape right now?
I’d start by describing the landscape as steady, certainly from the last two years, just adjusting to a higher interest rate environment. You haven’t seen that sort of breakout in demand activity. It seems overall that the market is waiting on a signal, whether that’s clarity on the trajectory of interest rates, inflation or potentially tariffs. 

For who’s coming in, and what are they looking to do: I’d say a little bit of everything, but business acquisition has increasingly become the common borrower profile for SBA. There’s been a lot of discussion in the media on the impending generational wealth transfer, but it’s not often discussed how much of that wealth is enterprise value in small and medium-sized businesses, and that’s where SBA as a tool is incredibly valuable. Generations look to either inherit or potentially exit those small businesses they’ve built over the last 15 years.

City National positions SBA lending as part of a broader relationship banking strategy, alongside lines of credit and other financing. How do you decide when SBA is the right tool versus using your own balance sheet products, and what do those conversations with clients look like?
First and foremost, whether client or prospect, it’s an advisory conversation about both their immediate needs and their long-term aspirations and plans. That’s obviously the first part of that discussion: do we understand what you as a business owner want to accomplish well before we’re making a recommendation on a product type, SBA or otherwise. 

Generally, the programmatic pieces of SBA help drive those conversations forward to more natural alignment between product and borrower aspiration or borrower need. Common profiles of SBA borrowers are those looking to engage in business acquisition where SBA 7(a) is a very powerful tool. For potentially first-time commercial real estate purchasers who may not be in a position, from a capital perspective, to put down 25% towards purchase price and to maintain sufficient permanent working capital, SBA 504 becomes a natural conversation piece. 

For those smaller business borrowers who are looking for their first real working capital credit facility and the flexibility of the SBA Express line, with its seven-year term and two years revolving, gives them that flexibility, but also a known repayment term and some predictability into their credit structure versus conventional small business credit products that may have a shorter pathway to maturity.

What does the timeline look like from when a business owner approaches you for that kind of advising to the loan being approved? Has that changed in the last year?
That’s largely a function of the complexity of the request. Those that are more straightforward – new working capital lines of credit or general-purpose business loans through the SBA – are roughly 60 days from start to finish. More complex transactions, certainly those business acquisition loans we’ve mentioned and real estate loans also, probably are within 60 days in most cases, if not faster. 

Timelines have stayed consistent within the bank, though the SBA’s closure in the last quarter of 2025 certainly did stress some of those timeframes industry wide. But generally speaking, yes, they’re in line with prior periods. In fact, they might be slightly accelerated, just based on experience and some grown capacity in the SBA, certainly coming away from the (Paycheck Protection Program) period.

City National has historically leaned into industries like entertainment and real estate. How does that specialization shape your SBA lending?
I’d say we’re very familiar with those industries and have some specialization that makes us a great partner among SBA providers within those industries. But at the level of the bank that I manage, the business bank, we’re pretty industry-agnostic. We’re ready to support any small business in L.A. and have experience across all industries, but maybe a unique opportunity for providers in those areas of historic specialization of the bank. I would say that we’ve taken since 2016 a lot of steps forward to be that more holistic business banking provider across all industries here in L.A. The SBA has been at the vanguard of that.

How has the introduction of a 0.50% guaranty fee for the 2026 fiscal year, up from 0% the previous year, affected your lending?
There’s some volatility right in the fee structure of the SBA programs over the last few years, which has required us to be more dynamic in our engagements with prospective borrowers and borrowers even in process, and we’ve managed through those changes. At times, we’ve had to potentially pivot from an SBA product to a conventional product. 

We have some strong partners within the Small Business Finance centers who provide the California Small Business Loan Guarantee Program, which is a state-level alternative to the federally provided Small Business Loan Guarantee. It has some nuances and is not fully aligned with the SBA but is a great alternative borrower that has had less volatility in its mandate and structure over the last few years.

Typically, SBA loans can go up to $5.5 million, with new higher caps for manufacturers, but many small businesses need far less. How well is the current system serving borrowers who need, say, $100,000 to $500,000, and where are you seeing gaps?
City National has been very proactive in engaging with community partners who support small businesses at the lower end of the borrowing dollar amount and spectrum. We have had a small business lending program within City National Bank for the last few years to provide some higher-level consultation, especially to first-time borrowers at those lower dollar amounts and starting as low as $10,000. We want to be a bank to every small business in Los Angeles, and we want to support those potential big businesses where they start, which is our small businesses.

Do SBA loans tend to be an entry point into a broader banking relationship at City National?
Absolutely. Small business borrowers are our clients. They’re not customers. It’s not a product. It’s the cornerstone of a relationship. We aspire to be the relationship bank of any small business that we support with SBA lending, so it’s a natural entry point. It’s an inflective moment for a small business to acquire an SBA loan. Whether that’s their first real working capital facility, a major capital acquisition, real estate equipment or otherwise, those are those moments where a consultative banking partner really helps drive the best outcomes. 

What are the early signals you’re watching in your pipeline, client conversations or repayment trends that might suggest where SBA lending is headed in the next year or so?
A broad trend is, as I go back to the trajectory of interest rates, the majority nationally of SBA loans are made on variable loan terms at a variable rate of interest. There was broad sentiment in the U.S. economy over the last few years that we’d see clarity and potentially a downward trajectory in short-term interest rates, and now that has quickly pivoted to less certainty and signals from the Federal Reserve that they’re going to moderate the pace of those cuts, or at least be more patient, given the pressures of inflation or potentially geopolitics. I think that is the trend to watch. 

I’ve seen that borrowers who were potentially more bullish on the trajectory of interest rates are being more cautious, and also looking at their current SBA financing and potentially considering refinancing that into a fixed rate of interest because they’re not as confident that their rate is going to continue to drift down with the overall interest rate market. (They’re) looking to be more cautious and better position their balance sheet now for future opportunities, rather than waiting for the other shoe to drop.