What the future of SBA small-business funding looks like in the San Francisco Bay Area

Until more than two years ago, the U.S. Small Business Administration might have been an unknown to many. COVID’s arrival in early 2020, and its economic impact, changed that. SBA programs geared up to help get businesses through the chaos.

Has this changed the role of the SBA in supporting small business? The Journal asked those whose jobs at area financial institutions include SBA loan programs to supply some answers.

What’s the program under SBA lending that you believe is perhaps underutilized, yet could be a great benefit to the small business owner?

Jeff Clark

Vice president, senior lender in the Craft Beverage Group, Live Oak Bank, 100 B St., Suite 100, Santa Rosa 95401; 707-331-9098;

With more than 20 years in the banking business, seven in his current position, Jeff Clark has worked with wineries, breweries, distilleries and craft beverage producers throughout the United States, ranging from small family operated businesses to publicly traded companies.

Jeff Clark: I am not aware of any underutilized programs per se. Congress keeps having to appropriate additional funding to keep the 7A and 504 programs from running out of funds so I would say they are being well utilized.

Brian Kilkenny

Business services administrator, Redwood Credit Union, 3033 Cleveland Ave., Santa Rosa 95403; 707-576-5422;

With more than 11 years banking, three in his current position, Brian Kilkenny oversees Redwood Credit Union’s business loan portfolio. He says RCU is number one in the entire San Francisco district — which includes all of the Bay Area and the North Bay, extending north to the Oregon border — in number of loans for all third-party lenders.

Brian Kilkenny: The SBA 504 program provides a great benefit to business owners, and it seems to be underutilized. Redwood Credit Union was the No. 1 SBA 504 third-party lender by number of loans in the SBA’s San Francisco District (including the North Bay), and we’re a big believer in the program. It’s excellent for borrowers because it provides a longer term, fixed-rate option for acquiring or refinancing a business property.

Bob Thompson

Vice president, Bay Area Development Company, 1801 Oakland Blvd., Suite 100, Walnut Creek, 94596; 925-472-5603;

Approaching nearly four decades in the banking business, 27 at his current post, Bob Thompson is originally from Massachusetts and joined Bay Area Development Company, a SBA Certified Development Company specializing in SBA 504 loans, in 1995.

Bob Thompson: I don’t think it’s a program so much as a resource, which are Small Business Development Centers. These organizations are staffed with seasoned business professionals ready and able to assist small businesses in a variety of ways, including preparation of operating projections, development of marketing programs and strategy, and general business planning and advice. And they do it for free.

George Mavridis

Senior SBA solutions officer for San Francisco and Bay Area, Chase, 560 Mission St., floor 2, San Francisco 94105; 510-365-6142;

George Mavridis: This is an important question. There are many SBA lending options to choose from and I would say it is about finding the right fit that addresses your financing needs, depending on the stage of your business.

As an active SBA lender, we spend a lot of time on educating consumers. Our goal is to ensure small businesses, customers and non-customer alike, have the available resources, information to make an informed financial decision for their business.

For example, a business owner looking to buy a building or invest in real estate for their business may find value in a SBA 504 loan program. A start-up business may find value in a SBA Express loan to help with operating debt and equipment financing, which recently increased the borrowing limit to $500,000.

Speaking to an adviser/banker about available tools and resources is always a great idea. Your [lending] advisor should be able to guide you through the entire process, provide helpful insight and find solutions.

Ole Tustin

Vice president, SBA business development officer, U.S. Bank, 1 California St., San Francisco, CA 94111; 415-595-4709;

Ole Tustin: While we mainly focus on the owner-occupied building purchase for small business, a newer and less utilized programs is the SBA’s commercial refinance programs. The new SBA 504 refinance program allows the borrower to more easily obtain some cash out for business working capital needs, in addition to refinancing into a new term loan of up to 25 years.

Previously, the SBA restricted most working capital or required very specific proof of uses for it.

Brian Wilken

Vice president, SBA business development officer, Wells Fargo, 200 B St., Santa Rosa, CA 95401; 628-217-1629;

Brian Wilken: I think the SBA 7(a) start-up loan program is underutilized and an incredible way to launch a new business. At Wells Fargo we do a lot of SBA 7(a) startup loans for business owners looking for financing to launch their business for the first time.

The SBA program can be a great way to obtain start-up capital at an affordable fixed-rate 10-year loan term that keeps operating capital in our client’s pocket so they can continue growing their business.

Joseph Wood

Vice president, small business banker, Bank of America, 6545 Hunter Drive, Rohnert Park 94928; 707-588-2950;

Joseph Wood has been in financial services for 10 years working exclusively with small and mid-size businesses.

Joseph Wood: We are helping more North Bay business clients refinance their commercial real estate loans under the SBA Mission Refinance program so that they can get lower interest rates before rates go up, helping them lock in better savings for the longer term.

Any business with owner-occupied commercial real estate under the SBA 504 program should consider this.

Paul Yeomans

Senior vice president, wholesale banking sales manager, Exchange Bank, 545 Fourth St., Santa Rosa 95401; 707-524-3328;

With more than 30 years in the banking business, including five in his current post, Paul Yeomans oversees Exchange Bank’s commercial banking, construction and commercial real estate, and Small Business Administration practices, with a focus on single, multifamily and low-income housing in the North Bay.

Paul Yeomans: The ability to buy commercial real estate with less of a down payment – this can be a 504 or 7(a) loan depending on the business owners’ needs. It allows them to invest in the location their business operates from and provides a bit of security, knowing they own the property.

Business acquisition loans also provide a benefit when the time comes and they want to retire – employees or new owners have a good way to purchase that business. SBA lending also helps businesses with the resources they might need to expand.

What are your five top tips for applying for SBA loans, especially for those applying for a program for the first time?

Jeff Clark:

  1. Understand the definition of cash flow. It never ceases to amaze me the number of business owners that don’t know if they have positive or negative cash flow. earnings before interest expense, depreciation and amortization (EBIDA) is the fundamental definition we use. It is difficult to have confidence in a borrower that doesn’t understand how they will repay our loan.
  2. Provide complete and accurate loan documentation. One of the top reasons loans stall in the application process is because of incomplete or inaccurate documentation. If we didn’t need it we wouldn’t ask for it. Sloppy documentation does not instill confidence in your banker.
  3. Disclose any potential issues before the bank discovers and asks about them. If you have made mistakes take ownership and tell your banker what you have learned from that experience and how you have corrected matters.
  4. Provide financial projections that are based in reality. Provide clear concise assumptions to support your projections. It is always better to exceed your projections than miss them badly. Overly optimistic projections do not offset historic underperformance.
  5. Be prepared to be grilled by your banker. We expect and have a fiduciary responsibility to be repaid as agreed. We are judged by the credit quality of our borrowers. Know your business better than anyone else. If finance and accounting is not your strength hire someone to help you. Assistance is available from your local SBA subsidized Small Business Development Center. Give us the confidence we need to support your request.

Brian Kilkenny: Here are four that come to mind:

  1. Don’t be afraid to ask your lender questions and what to expect.
  2. Be prepared to discuss the history and plans for your business. The SBA program is designed to help you achieve the goals you have for your business, but you’ll need to have a well-thought-out plan.
  3. It’s not all about the numbers. Letting your lender and the SBA understand how this loan will affect you, your employees, and the community really matters.
  4. Block out some time to complete the application and documentation the SBA requires. It’s a bit more than a conventional loan, but is a great opportunity to evaluate your business and your plan for success.

George Mavridis:

  1. Visit the U.S. SBA SCORE site, which connects early-stage/new business owners with experienced small business executives as mentors. It is a wonderful resource available to all small businesses.
  2. Visit the Chase Business Resource Center, which provides entrepreneurs with free education, tools, and insight to help them start, manage and grow, including how to apply for a SBA business loan.
  3. Establish a banking relationship. Having a strong relationship with a banker can go a long way in growing and supporting one’s business. A banker is a small business advocate who is there to help and protect the business. Be open and honest about the business needs when speaking with a banker.
  4. Be prepared to supply paperwork. The SBA business loan application process requires the right document and materials. It is like that for other bank loans, with a few additional forms. A banker can help guide you step-by-step.
  5. Save for down payment. SBA loans require some form of down payment.

Bob Thompson:

  1. Be prepared and thoughtful when you approach a lending institution with a financing request. My experience is that there is often a rush that leads to a less than ideal application, which ultimately lengthens the process to the detriment of all concerned.
  2. Be clear in how you will use the funds and how it will benefit your business. This could include the need for an operating projection that is supportable by detailed narrative operating assumptions.
  3. Know your strengths and weaknesses, and detail how you will build on the former while addressing the latter.
  4. Sell yourselves and your business and why you are a desirable client for the lending institution.
  5. Have a back-up plan or acceptable alternatives to your ideal financing request.

Ole Tustin:

  1. Know that an SBA lender first looks at historic cash flow (debt service) of the business. An existing business needs to typically have a least 12 months of debt service. If your business is a start-up, the projections and business plan need to be backed up by detailed assumptions.
  2. Attention to detail on the application goes a long way. Don’t leave questions blank.
  3. Quality of company prepared financials is important. You’ll need to have up to date interim financials (within 60 days) that have a balance sheet.
  4. Talk to an SBA banker. They can explain what the SBA lender is looking for and how to best package your request (and what to request – maybe the business needs working capital, also).
  5. Have your documentation ready. Three years of tax returns and interims are required. Know if you have credit issues and how to address them.

Brian Wilken:

  1. Engage with your lender early – ask questions that will help you make decisions going into your deal and learn more about financing options and requirements.
  2. Discuss your deal with multiple lenders – every bank has their own appetites for different types of loans and offer different terms. Make sure that you’re working with the right lender for your situation.
  3. If there are any negative elements to your loan profile, bring it up and call attention to it with your SBA Banker. This allows us to learn about the business and call attention to other strengths that mitigate any weaknesses. This comes across much better than uncovering a surprise during underwriting.
  4. Approach the early weeks of your application process with urgency. A lot of our clients wish they had those days back as they approach their escrow close date.
  5. Ask your lender to compare and review different products and loan structures with you. At Wells Fargo we do a lot of loans that have a fully-fixed interest rate for the life of the loan, but most SBA loans are paid off or refinanced in less than 10 years, so sometimes taking a shorter-fixed rate loan product with a lower interest rate may be a better deal, depending on the business owner’s situation.

Joseph Wood:

  1. Have current financials.
  2. Create a robust and meaningful business plan.
  3. Ensure meaningful and realistic projections, especially after coming out of the pandemic.
  4. Leverage resources provided by SBA like technical assistance, SCORE, educational sessions. And Bank of America also has resources to help small businesses.
  5. Visit the SBA website,, to see the different programs and resources and then bankers can assist with lending on programs like SBA Express, SBA 7(a) and 504 loans.

Paul Yeomans:

  1. Do your homework and visit the governments’ SBA website.
  2. Work with an SBA preferred lender like Exchange Bank, which has the knowledge and experience to make the process easier.
  3. Be organized and patient knowing you’ll need to provide a lot of information.
  4. Focus on the end result – a new business, expanding your business or acquiring that piece of property.
  5. Remember – this could be your dream come true.

Programs to aid businesses during the pandemic aside, has there be a change in the type of business and/or the background of people applying for SBA programs? If so, why do you think that is the case?

Jeff Clark: Some businesses thrived during the pandemic, others did not. Those that did find success are in need of capital to continue that growth. Those that struggled need capital to survive.

PPP and EIDL helped many businesses but that support and the benefits it provided are waning. Our lending policy, as with many banks, was more conservative during the pandemic. Our portfolio held up well. With rising interest rates banks will be more cautious going forward.

Brian Kilkenny: In many cases, and regardless of industry, we’re seeing similar or better qualified applicants than prior to the pandemic. This may sound counterintuitive considering the craziness and considerable headwinds presented by pandemic-induced economic issues in 2020, but many of the business owners seeking financing have strong balance sheets and good results in 2021.

That made financing for growth and expansion more economically feasible than during and immediately after 2020. We believe this can be attributed to adequate pandemic assistance coupled with solid 2021 results for many industries here in the North Bay.

George Mavridis: From where I sit, there has not been much of a change or shift. The types of businesses and people that apply for the SBA programs vary -or- are very diverse across industries and backgrounds. For example, we expected to see volume from restaurants, which have been among the hardest hit industries, but the demand has recovered quickly.

Thanks to government relief programs like Paycheck Protect Program (PPP) and Economic Injury Disaster Loan Assistance (EIDL), small businesses have access to working capital to cover rent expenses, pay employees and manage their operations short-term. I am proud to say JPMorgan Chase was at the forefront of delivering PPP loans to small businesses, funding more than 400,000 loans totaling $40 billion.

Some business owners, existing businesses in particular, are now focused on ways to stay open long-term that includes expanding their business model to withstand any future disruption by acquiring new businesses.

Bob Thompson: Not really, though there are always ebbs and flows in lending to specific industries. Entrepreneurs always have been and will be risk takers looking for opportunity whether in good times or bad.

Ole Tustin: During the pandemic, businesses that were deemed “essential businesses” did well and in turn applied for new money. Now that most other businesses are stabilizing (those that did not fold), we are seeing a return of all business types. Many of these stabilizing businesses are just now reaching the 12-month mark of positive cash flow required for many SBA programs.

Across the board there has been an uptick in demand, especially in real estate building purchases, but we are also seeing more business acquisitions. I think we are seeing this because rates have been historically low, but also because what many businesses experiences during COVID has led them to want to control their own future. SBA programs can really help drive that stability and planning for business owners.

Brian Wilken: I think the types of businesses applying for SBA loans has stayed relatively consistent – we see a wide net of industries coming to us at Wells Fargo, and that has remained the case over the past couple of years. Aided by some of the changes made by the SBA, we saw an uptick in refinance opportunities from seasoned businesses over the past two years with customers looking to take advantage of a record low-rate environment.

Now that we’re seeing rates go up as the Fed looks to curb inflation, refinance opportunities are leveling off again, and we expect to continue supporting business owners coming into growth opportunities, including expansion, building ownership, and other types of transactions.

Joseph Wood: We’re seeing larger-size dollar transactions for SBA products going to more complex and sophisticated companies that have larger annual revenues. So, SBA lending is definitely no longer considered just for the small mom-and-pop micro businesses anymore.

Paul Yeomans: Yes, I think people have started to make different choices and one of them has been looking at their level of job satisfaction and the possibility of working for themselves. SBA programs provide that opportunity with business acquisition loans and working capital to support new ventures. There seems to be a greater diversity in SBA customers, which tells me a lot of folks learned the benefits of this type of lending with all of the news around PPP loans.

Other local small business advisers

Jenny Tice, business development officer, Capital Access Group, 150 California St., Suite 250, San Francisco 94111; 415-217-7601; With about a decade in the banking business, four in her current post, Tice facilitates 504 financing for business owners throughout the Bay Area, with a focus on the North and East Bay counties. She reports Capital Access Group had a record year for loan approvals in our last fiscal year, with over $91 million in SBA approved funds.

Compiled by Michelle Fox, North Bay Business Journal researcher.

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