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How M&T dominates local SBA loan market

M&T Bank has maintained its regional dominance in SBA lending, the bank’s officials say. (File photo)

M&T Bank has maintained its regional dominance in SBA lending, the bank’s officials say. (File photo)

M&T Bank once again played a significant role in Baltimore’s Small Business Administration loan market, capturing making nearly half of the market’s loans in the most recent fiscal year.

The bank’s dominance in the market comes from an institutional commitment to small-business lending, said Eleni Monios, the bank’s business banking market manager for greater Baltimore and Delaware.

“It’s in our fabric,” she said. “It’s part of how we go out and do business. It’s just part of who we are. It’s part of how we present in our communities.”

In the 2018 fiscal year, which ended Sept. 30, M&T Bank made 340 loans for $39 million. That increased its total loans from last year by 36.5 percent. Overall, the bank made 49 percent of the total loans in the Small Business Administration’s Baltimore district, which covers all of Maryland except for Montgomery and Prince George’s counties.

In all, the Baltimore district saw 692 loans valued at $223 million made through the SBA’s 7(a) program, which helps secure loans to businesses that may have had trouble getting the capital otherwise. Through these loans, business can get up to $5 million. The loans are typically used for acquiring land, purchasing equipment or working capital.

Monios gave an example of a business that may need a new piece of equipment, but over a traditional three-to-five-year loan repayment period, the payments could eat up most of the business’s cash flow. With the extra security of a Small Business Administration loan, M&T can extend a loan for the same amount over a period closer to eight years, freeing up more of the business’s cash flows for reinvestment and to help grow the business.

“Because of the ability to use this program,” Monios said, “we can reach far more business owners than we would otherwise.”

The capital a business gets from loans can be critical to helping grow a city’s business community: A Johns Hopkins University report in August found banks’ small-business lending fell in Baltimore even as their deposits grew, which researchers attributed to the amount of resources banks have to commit to underwriting these Small Business Administration loans.

“The reason that I’ve been given is just you have to put staff in who know how to underwrite the loans, what the SBA requirements are,” Mary Miller, one of the report’s authors, told The Daily Record at the time. “You have to have people who are skilled with that type of loan.”

M&T Bank has underwriters committed just to 7(a) loans and does constant training to keep up with policy changes, Monios said.

“SBA loans, we have to be careful that we are complying with all of the policies and procedures set forth by the government,” Monios said. “That’s, I think, our differentiator. We have amazing infrastructure in place that provides a whole host of resources to these … people that are out on the street in greater Baltimore.”

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