Wells Fargo exec: Small businesses need guidance
NEW YORK — When Lisa Stevens speaks about her role as head of small business banking at Wells Fargo & Co., she focuses more on how she can help her customers rather than how she can grow the bank’s loan portfolio.
Wells Fargo is already one of the country’s biggest lenders to small business. Over the past 10 years, it has made more Small Business Administration-backed loans than any other bank, with a total of $8.5 billion. But Stevens is aware that her customers also include those who can’t qualify for a loan.
“It’s about getting a plan and helping people to set up and establish goals and move forward,” says Stevens, who has led Wells Fargo’s small business banking operations for two years.
Stevens meets with small business owners several times a week, and finds that many are in need of guidance.
“They don’t know what they don’t know, and they don’t know what’s available to help them,” she says.
Wells Fargo is working to expand its services to business owners, including finding more ways for them to do their banking via mobile devices. Stevens writes a blog aimed, in part, at women business owners. And Wells Fargo continues to promote its lending programs, particularly to women-owned companies.
Stevens, who volunteers with groups including the National Boys & Girls Club of America, Children’s Hospital Los Angeles and the Partnership for Los Angeles Schools, says she learned when she was growing up that it’s important to help others. She says that contributes to her focus on helping small businesses, or as she puts in, making a difference with the bank’s customers.
Stevens recently spoke with The Associated Press about her job and small businesses. Here are excerpts, edited for brevity and clarity:
Q. What’s your take on the state of small businesses and their recovery from the recession?
A. It’s been very broad, with positive trends and we’ve seen it regionally and across major industries. In regions like California and Florida and Arizona and the industries that were significantly impacted by the recession, we’ve seen the most improvement. We saw a really good increase in loans. For the first half, we saw year-over-year a 25 percent increase in our small business lending.
We know that over 20 percent of small businesses are in industries that are directly impacted by what happens in the overall real estate market. Construction, interior design, architectural services, landscaping, the list goes on. But we think there would also be a much larger impact on all small businesses from an improvement in the real estate market. Consumer spending is helped by the recovery in home prices. So theoretically, we would expect to see a significant improvement in overall small business financial health just from the improving real estate market.
We also think there’s a lag effect from business owners being cautious and holding off on hiring until they see a tangible change in demand for their products and services. We think that’s going to catch up as they see what’s happening with the real estate market.
Q. Has Wells Fargo added more bankers to work with small business owners?
A. We’ve added between June of 2012 and June of this year about 1,900 bankers, and we have a total of 32,000 bankers across the country that are able to help small business customers and that are trained to help and serve their financial needs.
Q. How does a major bank like Wells Fargo win over small business owners who might believe they’d be better off working with a smaller bank?
A. In the second quarter, lending on our Business Direct credit cards, lines of credit and loan products that are primarily under $100,000 were up 55 percent. These are for the small mom and pop startup businesses that are maybe opening their doors or are just starting to expand with that new employee, or maybe a new piece of equipment.
Being the No. 1 small business lender for 10 years gives us some credibility in any community. In every single community where you have a branch location, across the entire nation, there’s someone in those branches, in those communities that can help small businesses be successful.
With small business customers, so much of it is about the relationship. You don’t all of a sudden say, I’m going to start a business and I’m going into a Wells Fargo branch and they’re going to give me a loan. You’ve got to figure out what your business plan is, what you’re going to do. Then, over time, we have to figure out what we need to do as a banker to help you understand how you can be successful. There’s a lot more to the banking relationship than just the lending part. We ask, how are you going to accept payments? How are you going to pay your employees? How are you going to manage your savings? All of those things come into play.
Q. What do your bankers do when a small business doesn’t qualify for a loan? What can an owner expect Wells Fargo to do to help them get on the path toward being able to borrow?
A. We support community- based organizations and microlenders who can make those loans. We’ve invested over $95 million in 108 microfinance small business lending organizations since 1998. That’s an important way to sometimes get help for people who can’t work with the traditional financial institution at the start.
The biggest thing is figuring out, what are the company’s goals, and what’s realistic? Part of the job of the banker with the small business customer is to say, how can we have your business grow without you leveraging yourself too much? What’s the step-by-step process so a year from now, 18 months from now, two years from now, when you are ready to take out that loan, you’ve got the credit, you’ve got the good credit score, you’ve got the stability of what’s been happening with the business.
It’s about managing access to cash, their business checking account, making sure they understand accounts payable, accounts receivable. Understanding the opportunities, for example, mobile deposit capture, that can save them time — especially if they’re a sole proprietor, so they can spend more time generating revenue and the things they need to do So I think there’s a lot, especially in the beginning for small business customers to understand there’s an array of services out there to help them get established and to start growing their business.
It’s not just about credit. It’s about how are they building the business to keep it moving. That’s the biggest part for the small business owners to understand.
Q. Small business owners are a changing demographic. Younger entrepreneurs are much more savvy about technology and social media than older ones. How do you keep your bankers current so your 50-year-old banker understands the way a 30-year-old owner works?
A. We keep our bankers current by having them keep us current. We’ve got an array of team members working for us, including a very large population of millennials (people age 18 to 29). We’ve got to be making sure that we’re soliciting their feedback on how we connect and spend time with customers, and make sure we’re giving them the things they need. We just rolled out mobile phone receipts for ATMs. That may not be as important to me, but to someone in their 20s, having something to access using their mobile device is really important.
When we rolled out the business needs section of our website a year ago, we spent a lot of time taking our team members of every generation through it, and asking, what are we missing? What do we need to make sure we’re paying attention to? And making sure we had a digital aspect to it. When you look at the senior executives in most financial institutions, they’re typically all at least in their 40s if not older. We need to talk to that new generation that’s just starting to work in our industry and understand again how we communicate with millennials and understand what’s different about them. Is it important for them to be able to follow a Twitter feed or look at a Facebook page? Or have easy access to the Wells Fargo blog so you can click on something and get information at your fingertips?
The one thing that I’m positive of is, even if you want to do everything from a digital perspective, at some point in your small business career, you’re going to need an advocate, someone to sit down and talk about you financial plan and you’re going to need that relationship. I think that’s one thing we’re teaching small business millennial customers. You want to build a relationship. You want someone who can give you that guidance. My analogy is, it would be great if you never had to go see your doctor, and he could prescribe everything over the phone or by email or text, but the reality is every once in a while, the doctor has to see you and talk with you and examine you. I think that’s the same with banking.
Q. You do a lot of volunteering. What made you decide to do that?
A. I learned at a really young age that you’ve got to make sure you’re out there helping other people and being of service. I went to a Jesuit university where they drilled that into you. They drilled that into you, social justice, making sure you’re a part of something bigger than yourself. I think that’s one of the attractions to me of Wells Fargo. I think a lot of kids these days may not get that exposure. They may not learn that it’s fun to volunteer and do fun things. We get brand new team members who come in, and we talk to them about going out and volunteering, and giving them hours to volunteer.
Q. How does your volunteer spirit tie in with your role as head of small business banking?
A. I had a major in college in political science and a minor in philosophy and economics. I thought I wanted to be an investigative reporter. I think the attraction for it was the opportunity to change the world and have the world be a better place. And I think going to work at the bank, it became a lot about helping people and coaching them and helping them realize that they could make a difference for other people. And it did help going to work for a company, to have someone like (former CEO) Dick Kovacevich say, our mission is to help our customers succeed financially, and that was something that was so easy for me to get behind and be passionate and excited about. I think 99.5 percent of the people who wake up in the morning want to be part of something that’s greater than themselves and helping to make a difference.
At the end of the day, the people I work with say, I’m getting to help small business and make a difference. That’s why small business is a great story. We really grabbed onto something when we said, we’ve got to be part of the solution. We can’t sit back and say, woe is me and feel sorry for ourselves because our industry is getting a little bit beat up — and in some cases, rightfully so. We’ve got to be part of the solution for getting America back on track. And this is such an easy way for our team members to rally around something.
Q. If you were to start a small business, what would it be?
A. My husband and I have always had this idea that someday, we’re going to go to Italy to a cooking school in Florence, where you go for four weeks and they teach you, then come back to California and go to Napa Valley or Sonoma area and open a very small trattoria, live in a mobile home and blow money on a restaurant. It would be really small, with 10 tables, and have good food and good wine.