NAGGL Board of Directors Election – Terms Beginning January 2017
The following questions were asked of each nominee in order to determine their stance on current SBA policies and their ideas for setting priorities for the association. Please review each candidate’s responses to help determine whose priorities for the 7(a) program and NAGGL most closely match your own. [The questions are included on the header of each page as a reminder as you review this lengthy document.]
1. If you could make one change in SBA's 7(a) loan program requirements, what would you change
2. What are the main weaknesses that you believe the SBA should focus on to improve the performance of the 7(a) program?
3. What would you recommend NAGGL set as its first priority in its capacity as a representative of lenders, broker/dealers, service providers, and other involved in SBA 7(a) lending?
Faxable Ballot >
Lending Institutions (4 Seats Open, 10 Nominees)
SBA Compliance Manager
Georgia Banking Company
Over 23 years’ SBA experience
Involved in all aspects of the SBA loan process on a daily basis, including the sale of the guaranteed portions of SBA 7(a) loans
Member, Board of Directors Georgia Lenders Quality Circle
1) Streamline and reduce rules with respect to franchise rules and processes. I still find this a very cumbersome process with loans that are not on the Franchise Registry. Also, the Delegated Franchise Review process is very slow and that negatively impacts loan closings.
2) Consistency within the SBA in regard to interpretation and understanding of the SOP. I think more training is needed for SBA personnel. Improved training of SBA personnel would greatly improve a lender's understanding and correct interpretation of the SBA SOP and the SBA 7(a) program.
Staffing is also a significant weakness in the processing and liquidation centers. This negatively impacts our ability to maintain compliance with Regulation B as we have to wait so long for SBA to approve a loan, a franchise, or a change to a loan.
3) Continued support and representation of lenders in regard to the Small Business Lending Oversight Act of 2016.
I also think that support is needed from NAGGL to have the SOP 50 10 rewritten to exclude CDC’s from it. I would also like to see all of the information regarding, as an example, an International Trade Loan in the same section. As the SOP is currently written, collateral, eligibility, and other criteria are in different sections and something can be missed when trying to determine eligibility.
President & CEO
CDC Small Business Finance
San Diego, CA
Kurt Chilcott serves as President & CEO of CDC Small Business Finance, the nation’s leading SBA 504 lender and SBA 7(a) Community Advantage Lender. CDC has funded well over 10,000 small businesses, providing over $13 billion in capital and resulting in the creation of more than 175,000 jobs. CDC has established numerous national lending milestones and been recognized as SBA National Lender of the Year three times.
Kurt is a tireless advocate for the SBA industry and has developed dynamic relationships with SBA management and congressional representatives. He has served in numerous leadership positions at the state and federal levels including Chair of NADCO and IEDC and on bank advisory boards. Kurt has served on the NAGGL Board for 8 years and led NAGGL’s 504 Committee for most of that time.
He holds degrees from Harvard and the University of California Berkeley. When he isn’t helping small businesses he likes to get outside, preferably among the red rocks.
1) There is not a single change that will make a significant difference in the success of the program which has experienced tremendous growth. Our challenge today is to attract more lenders of all types into the program, ensure an effective oversight system that eliminates bad players and educate Congress and our other stakeholders as to the benefits of the program in order to inoculate our industry against harmful program changes or even elimination.
2) The small business lending marketplace is demanding faster decisions and a far higher level of customer experience – SBA must adapt to the demands of this changing market by making loans available more quickly and with less friction for the small business. With the growth in the program effective oversight is critical to ensure integrity in the program. SBA must attract more lenders – particularly community banks that have left the program and mission driven lenders that will help us reach underserved markets more effectively.
3) Program growth has attracted greater interest in the program from Congress and “government watchdogs”. NAGGL must build on its significant advances in the legislative arena to prepare for the change in Administration and position the industry in the most favorable light possible. This is one of those critical points in time for the industry when our success could result in program changes that diminish our ability to assist more entrepreneurs. Therefore working with Congress and SBA to allow for continued growth and success is priority one, two and three!
Executive Vice President, National Director
Diane Gallion has served two terms on the NAGGL Board of Directors advocating for lenders and their interests, particularly in maintaining a level-playing field within the SBA lending program. She was most recently instrumental in the adoption of the new affiliation rules for franchises. Diane has over 20 years banking/ lending experience, holding senior management roles within national SBA business units including Bank of America, Comerica, First National Bank of Arizona, Banco Popular and The Bancorp. In 2016, Diane joined Radius Bank as Executive Vice President, National Director and established the bank’s national SBA lending platform. Diane has given of her time and talents over the past fourteen years with NAGGL and has been pivotal in NAGGL’s training and educational programs. Diane is an ever present resource for NAGGL, as a member of various committees as well as the Board of Directors, consistently addressing the concerns of participating lenders. Most recently, Diane represented NAGGL in Washington, D.C. lobbying for lender interests in all aspects of the SBA program.
1) SBA should establish a broker registry similar to lender registration to monitor the behaviors and compliance with the program, to keep the playing field level for lenders who try to protect program integrity.
2) Really establish and maintain good lender oversight process so that it will be meaningful to the lender. Audits should really add value and have well established guidelines.
3) We need to continue to work in DC to maintain the respect we have been building, and continue to hold our SBA leaders in check with compliance to preserve and protect the program's integrity. Help raise awareness of PAC need.
Senior Vice President
44 Business Capital, a Division of Berkshire Bank
Blue Bell, PA
A native Californian and avid fan of architecture, Scott started his career at Wells Fargo in San Francisco over 25 years ago. Scott worked in some of Wells’ largest offices before being promoted to Vice President and Business Banking Manager. Scott managed originations of twenty branches in and around San Francisco. Always looking for new challenges, Scott transitioned from originations management to Small Business Administration credit underwriting. Scott joined a Sacramento, CA based national small business lender where he could apply his problem solving expertise. So impressed with his understanding of the nuances of small business lending, First Union moved Scott to Philadelphia in 2000 to run a small business credit unit. After fifteen years in the Delaware Valley, Scott is happy to call Philadelphia home where he is SVP Operations Manager at 44 Business Capital, a Division of Berkshire Bank. A true renaissance man Scott holds a BS Degree from Drexel University with a minor in Architecture. Scott has melded his love of architecture to the practical knowledge of banking, construction, finance, lending, and risk management. Scott spends his free time with his spouse, two beagles, and rowing on the Schuylkill River.
1) Admittedly the program has come a long way since I started in SBA lending in 1993. Advancements from centralized underwriting to inclusive size standards have modernized SBA. Yet some requirements remain unclear. A bright line test to ‘all available collateral’ with respect to liquid assets should be reviewed. While the favorable no liquidity standard exists, it is frustrating to tell a successful entrepreneur their stock portfolio must be pledged for a business acquisition along with their house. While not looking to increase risk, clearer program guidelines on what constitutes reserved liquidity (college funds for families, etc.) would be helpful.
2) SBA has a strong ally in each delegated lender, yet many transactions must be processed under non-delegate authority. It is a weakness of the delegated lender program to force these well performing PARRiS partners to delay the deployment of capital into the marketplace and preserve jobs by sending transactions non-delegated. SBA should leverage technology to permit performing lenders to process all loans delegated with fair and factual monitoring of their portfolio and lending activities. An example: business acquisitions with less than 25% down, yet PARRiS score of lender is under 35, let them process delegated; their niche is performing.
3) Education and creating a ‘farm league’ of professionals having a passion for helping create dynamic solutions for small businesses are imperative to maintaining the expertise and service of the program, both with the private sector AND the agency. NAGGL and SBA must continue their efforts to develop the next generation of small business advocates to ensure our industry thrives and this essential government program continues to seek bi-partisan support from a Congress that recognizes the program dollars out the door are not the only metric; we must show the entire picture of making small business dreams come true.
SVP/Director of SBA Lending
Pacific Premier Bank
Diane Heyden is Sr. Vice President and Director of SBA Lending at Pacific Premier Bank, in Irvine, California. The bank operates a nationwide SBA lending platform. Presently, she is responsible for the management of the SBA business development and processing functions, and oversees 15 business development officers, and 10 processors. Diane has been actively involved in SBA lending for 30 years, having previously established SBA departments for three different financial institutions, including Pacific Premier Bank. Diane was one of a four-person executive management team that began and operated a very successful de novo bank in 1999. Diane currently serves on the NAGGL Small Lender West Committee, and is a graduate of Pacific Coast Banking School.
1) Not allowing lender to reimburse applicant for eligible expenditures incurred, post-closing, while still in the disbursement process is sometimes problematic. Assuming that the lender can adequately document that the applicant used the funds during the course of business, (and subsequent to funding the initial proceeds) allowing the borrower to take advantage of various purchasing opportunities (on-line, auction, etc.) seems to make good business sense. However, the SOP does not allow an applicant to be reimbursed under any circumstances. This can often create a logistical problem for the small business. A more liberal requirement could benefit the applicant in certain instances.
2) Eligibility questions can be daunting, and some would contend that the interpretation of the SOP is subjective, or at the very least, designed to be deceptively vague. A resource for eligibility questions that doesn’t simply reiterate the verbiage in the SOP verbatim, would be beneficial. The ability to obtain a clear, concise interpretation from the SBA on eligibility matters would enable lender’s to submit under their delegated authority with confidence, alleviating the additional burden on the loan center which is created when lender’s elect to submit CLP when “in doubt” as to the question of eligibility.
2) I don’t know that this would be a matter of priority, but certainly worth entertaining would be the development of an application for mobile devices, designed to provide notifications (alerts), on breaking SBA news and information, such as Notices, Policy Changes, newsworthy articles, and resource materials.
Executive Vice President/Chief Lending Officer
First Bank Financial Centre
I have been actively involved with NAGGL and have participated for several years on the Small Lender Committee. I have been involved with SBA lending for over 25 years. I supervise a Community Bank’s SBA Department and I am actively involved with the issues that involve the SBA SOP and actual real loan situations. I believe in exchanging ideas with both other SBA lenders throughout the Country and the SBA policy decision makers.
• Reside in Erin, Wisconsin (Town hosting the site of the 2017 US Open Golf Outing)
• MBA in Business Administration from Marquette University
• Member and Past President of the Hartford Lions Club
• Past President of the Hartford Area Chamber of Commerce
• Married to the love of my life and have four wonderful younger children
• Enjoy surfing, traveling, and playing poker
1) I think the SOP rules in regard to “refinancing” past seller debt should be revisited and modified to allow for all refinancing of Seller debt that may have been put on interest only standby payments as long as those interest only payments were made in a timely manner. I do NOT believe the initial intent of the SBA was to make customers wait four years or more to refinance Seller debt. I believe that someone or some group has subjectively made this decision now without thinking of the unintended consequences of their interpretation.
2) The SBA should work on continuing to improve the turn-around response time on all GP submissions. The biggest negative aspect for customers with the SBA process is the amount of time it takes from application to close. For customers buying businesses or purchasing property the amount of time needed as a contingency in the offers to purchase put the customers at a huge disadvantage compared to another buyer that may be able to utilize conventional financing. This change could easily be put in the next SOP revision. I hope NAGGL would vigorously support my idea to make this change.
3) I believe NAGGL needs to continue to work towards ensuring the continuation of the SBA 7(a) loan program funding and keeping the fees reasonable. The continued success of the SBA program is dependent on receiving adequate funding.
Cecilia “Cece” Mitchell
SVP/Division Manager Small Business Group
West Valley City, UT
Cece Mitchell is senior vice president and division manager of Zions Bancorporation’s Small Business Group in Utah, which includes underwriting and processing U.S. Small Business Administration (SBA) lending for five states. She joined Zions Bank in 2005 to serve as the Zions Bank Business Resource Center’s founding director and later served as manager of the bank’s Women’s Financial Group.
With more than 30 years of banking experience, Ms. Mitchell previously worked for First Community Bank as senior vice president for Utah branches of First State Bank, N.M. Prior to that position, she was vice president and national SBA operations support manager for the SBA lending group of Washington Mutual Bank. Ms. Mitchell is a graduate of Westminster College with a bachelor’s degree in business. In 2005, Ms. Mitchell was recognized by Utah Business magazine for being a catalyst and one of Thirty Women to Watch.
Involved in the Salt Lake community, Ms. Mitchell has served on the board of directors for the Pete Suazo Business Center, on the Salt Lake County Revolving Loan Fund committee, was a member of the board of directors for the Risk Management Association and for the Utah Micro Loan Fund.
1) I would propose a simplification of the collateral requirements for SBA Small Loans. I believe there is a need to have unsecured capital utilizing a term loan (permanent working capital) up to $50,000. This would improve a lender’s ability to approve a loan, especially for service companies who do not typically have tangible collateral to pledge on a loan.
2) If there are weaknesses in the 7(a) program it would be in the technology utilized to track the SBA portfolio. It concerns me to know every lender submits a monthly 1502 report to Colson to upload to SBA to track activity. The activity codes are limited and do not adequately address the various loan “status” definitions currently used by the financial industry. SBA only allows for a current, in liquidation, or repurchase status code. This doesn’t adequately describe the status if the loan is 30-89 days past due but not yet being treated as in liquidation.
3) I would focus on the future of the programs, especially in light of the recent proposed legislation from the Senate Small Business Committee. We need to understand and provide educational materials to lenders on how to assist SBA in complying with the proposed portfolio reporting requirements. These are common sense reporting needs that our own financial institutions need as well. Working with SBA to be able to create a set of reports that can be utilized by all would be a huge benefit to the membership. We can take the mystery out and improve relationships.
Ready Cap Lending
New Providence, NJ
John E. Moshier is President of Ready Cap Lending a SBA regulated non-bank lender. John was previously the National SBA Manager at KeyBank in the Cleveland, Ohio for 12 years.
John holds Bachelor of Political Science and Public Administration degrees from the University of Findlay in Findlay, Ohio. He was awarded a certificate for completion of the Green Belt Program while working at GE Capital. He also has 10 years of military experience in the United States Army and Ohio National Guard.
In his 18 years of small business lending and finance experience, John has provided financing solutions to hundreds of growing small businesses in the manufacturing, wholesale, distribution and service industries. John built his dedication to and passion for small business at the grass roots level as he grew up and watched his Father build and grow a small business in Sturgis, Michigan.
1) The franchise requirements need to be easier to understand what is eligible and what is not. More resources also need to be addressed as well.
2) Turn times in the Guaranteed repurchase Center. To focus on accuracy and work flow needs to be managed to create better efficiencies. The program has grown over the last couple of years and so should the staffing of the agency to keep up with demand. With the two year rule to submit the wrap-up report from time of repurchase this is going to need attention.
3) With the current legislation pending I feel the priority is already set to keep messaging the purpose of the proposed legislation and be ready to provide guidance to lawmakers when appropriate and continue to educate the membership.
Sr. Vice President/Manager
I have been in banking since 1996 and in that time have been focused almost exclusively on providing financing to small businesses. I have been centered on the SBA space since 2005 when, as President, I led the national expansion of the small business lending group for First National Bank of Arizona. In 2007, based on the contributions of many, including current NAGGL Board Member Diane Gallion, FNBA was named the Small Lender of the Year by SBA, an award we received in New York City during Small Business Appreciation Week. I have been with Pinnacle Bank since 2011 and have been responsible for the growth of this Bank into one of the top 5 lenders in the State and the largest community Bank lender in the State. An advocate for the Program, I am a regular panel member for SBA events and SBDC engagements. I have attended NAGGL conferences and am a regular attendee at NAGGL’s annual Leadership Summit. I am aggressively seeking to expand my contributions to the industry by seeking a Board of Director’s seat with NAGGL.
1) The one change I would make would be to match the amortization / repayment period of a loan to the collateral provided as opposed to the use of proceeds. Doing so would benefit the small business Borrower by allowing longer repayment cycle thus reducing the burden to cash flow for Borrowers able to offer commercial or residential real estate as collateral for loan purposes other than real estate financing. Reduced repayment obligations would allow for Borrowers to retain more earnings and internally finance growth, both reducing borrowing needs and stimulating the economy.
2) The main weakness is the complexity of the Program. Further simplification of the SOPs will enhance lender knowledge of the Program. This will reduce dependency on the Agency for interpretation of policy, reduce the Agency backlog and increase turn times for processing requests. Enhanced lender knowledge can result in SBA delegating more decisions to lenders. Lenders will become more responsive to their small business Borrowers and the ease and speed with which capital can be invested into the market will improve.
3) Our Bank’s primary loan product is the SBA 7(a) loan and the primary driver of revenue / earnings is the sale of the guaranteed portion of the 7(a) loan. Thus, the lowering of the split fee cap from 110 to 108 will be negatively impactful. Doing so will limit the amount of capital all community banks can invest in loans to small businesses and increase the rates charged to small business, both in contradiction to Agency directives. As a community bank, we fill the void left by the larger financial institutions focusing on larger borrowers and not small business borrowers.
Sherrill J. Stockton
Senior Credit Officer
Live Oak Bank
Sherrill J. Stockton has been involved in SBA lending for over 24 years after her first and favorite career as a stay at home Mom for 10 years. She started her career working at a Minority Business Development Center helping minority borrowers procure SBA financing. She worked as Senior Vice President/ SBA Manager of Sonoma National Bank/Sterling Savings Bank for 12 years. She then joined Exchange Bank to start up the SBA Department at a 120-year-old community Bank. Sherrill currently works as Senior Credit Officer at Live Oak Bank where she mentors and coaches scores of new SBA lenders. Sherrill has served on NAGGL’s Technical Issues Committee for over a decade and chaired the committee for 4 years. She currently serves on the NAGGL Board of Directors, Executive Committee and is an instructor for NAGGL.
1) I would reverse the revised interpretation of eligible uses of EPC structures that eliminated the long time practice of using this structure in a change of ownership transaction. It makes no sense that the agency reversed course on a structure that lenders and the processing center have approved for years.
2) The SOP is simply too contradictory and confusing. My new job allows me to work with a lot of new lenders who are eager to learn the correct way to deliver the program. It is never acceptable to me when trying to explain why the real answer differs from the confusing SOP by saying “Trust me, I know”. Every lender should be able to read and understand the SOP.
3) Continue to engage its membership when key decisions regarding the support of legislation or regulations are contemplated. Board members serve the membership and we should strive to reflect the views and concerns of the membership.
Associate Member Category (1 Seat Open, 2 Nominees)
Kerri L. Agee
Banc-serv PARTNERS, LLC
Kerri Agee is the President and CEO at banc-serv. Kerri oversees the daily operations and is involved with the strategic vision of the company. Her path into the SBA world was immediate and direct. Her first position landed her at The Money Store in Sacramento, CA. Over the next five years, Kerri began to develop her knowledge and understanding of the SBA as she grew into more significant roles. After her stint at The Money Store, Kerri started banc-serv in 2002 with a grand vision. Her 20 years of SBA lending experience and dedicated focus have been the driving force behind her original vision and the company’s success over the past 14 years. Kerri is not only a tremendous leader and visionary within banc-serv, but a leader and asset to many groups supporting the SBA today.
I would like to see greater consistency and communication. Over the years, the SBA has encountered both productive and disparaging leaders who have provided open and closed lines of communication. When the SBA provides open communication, the industry is able to function properly and the mission of the SBA is accomplished. The goal of the SBA 7(a) program is to provide borrowers with access to necessary capital. This allows small businesses an opportunity to create jobs and retain employees. The last thing a small business should encounter is a poorly managed program and a rivaling political environment.
A continued and fundamental weakness of the SBA concerns the lack of SOP clarification. The industry has encountered a number of revised versions over the past 6 years, and though there has been improvement, confusion still remains among lenders. A small business owner encounters many challenging issues on a daily basis. It should not include uncertainty and delay often caused by open interpretations of the current SOP.
NAGGL is a distinguished voice for lenders and borrowers in the industry. I would like to see the continuation of that advocacy moving forward and I believe that NAGGL can even become a more prominent voice as it pertains to participating lenders. However, it is also the responsibility of lenders to maintain an open mind to NAGGL’s suggestions and advocacy tools.
C. Edward “Tee” Rowe
America’s SBDC (Association of Small Business Development Centers)
I’ve spent the last 20 plus years working and advocating for small business and the programs and policies that support them. My career started with 10 years on the Committee on Small Business in the US House (where I worked on several 7(a) revisions), and seven years at SBA where I worked in and then led Congressional Affairs.
I’m now CEO of America’s SBDCs, representing the Nation’s leading small business technical assistance provider, small business development centers (SBDCs). America’s SBDCs have been members of NAGGL since I joined their organization because I recognize the partnership that exists between so many 7(a) lenders and their local SBDCs. I want to expand and strengthen those partnerships which are based on a common goal to provide small business with the capital (intellectual and fiscal) it needs to thrive.
I want to bring my advocacy skills to NAGGL’s board to continue to grow the stature of NAGGL’s membership as the leading providers of capital to the small business community. I also want to strengthen the ties between NAGGL’s members and their local SBDCs to help fortify our mutual clients. NAGGL builds small business success and I want to help drive that message home.
I would change the application process for new lenders and make it more like the process for Community Advantage. Community banks, particularly rural banks, deserve at least as much access to 7(a) as CDFIs and mission lenders. Why does a bank have to go the SBA district office to get a 7(a) application instead of an on-line guide like CA? They are already chartered and regulated. If SBA truly wants more lender participation and more small loans they need to encourage lenders to enter the market. Stringent upfront paperwork has kept small lenders away and weakened the program.
SBA needs to work with NAGGL to develop a clearer “credit elsewhere” standard and eliminate the uncertainty in the current standard. The same clarity is needed in the new “prudent liquidation” process. SBA also needs to improve its data. SBA routinely touts the loan volume of the 7(a) program and “jobs supported” but doesn’t show the economic development value of that capital. As a result, the true economic value of the 7(a) program is missing from SBA’s annual Congressional Budget Submission. The 7(a) program can’t perform without the support and authorization it needs.
NAGGL’s first priority must be increasing the loan authorization caps and ensuring program stability. That means making the clear economic development case to Congress. 7(a) is the leading economic development tool in the SBA’s arsenal and must be recognized as such. That means it must be seen as the most fiscally sound, ROI efficient and cohesive program at SBA. Increased loan sizes have driven demand and authorizations up but, also created misplaced oversight concerns in Congress. To ensure sufficient authorization levels NAGGL needs a strategy that combines an industry led
oversight agenda with increases that support program growth and stability.