Five Questions With: Gregory Gould

Gregory Gould serves as senior vice president and manager of government guaranteed lending at Webster Bank. He joined the bank in 2015 after serving as a lender relations specialist for the U.S. Small Business Administration. He has a bachelor’s degree and a master’s degree in business administration, both from the University of Rhode Island.

PBN: How has demand for traditional (non-COVID) SBA loans fared among Webster’s clients during the pandemic? Do you expect to see a surge in participation now that Paycheck Protection Program loans and other emergency relief programs are ending?

GOULD: Traditional SBA lending activity is rising and expected to remain remarkably strong. In fact, in the 2020 fiscal year the SBA approved more loans – by both value and volume – than it had in all other years combined since the agency was founded in 1953.

We’ve also seen a significant increase in supporting underserved communities, like minority-owned and women-owned businesses, from the new administration. This is likely to translate into more programs, which could accelerate access to capital for the foreseeable future.

- Advertisement -

PBN: What should small businesses consider when deciding whether an SBA loan is a good fit for them? Are there certain purchases better suited to these loans at this time?

GOULD: The pandemic has led to many scenarios that make SBA loans ideal for business owners. Current interest rates are near historic lows, making it a perfect time to borrow if you’re looking to buy commercial real estate, fund the sale of your business to new owners or secure a line of credit, for example.

SBA allows for smaller down payments and often longer maturities than conventional business loans, so starting, expanding, or acquiring a business might be more affordable than you think.

PBN: How, if at all, has the SBA loan process changed as a result of the pandemic? Do you foresee future changes?

GOULD: The pandemic hasn’t changed the loan process for traditional SBA loans. That process is remarkably streamlined, contrary to the common misconception that it is bureaucratic and time-consuming. There are also some attractive new opportunities currently available to small businesses. Until Sept. 30, the SBA is waiving the guaranty fee on loans, making it more attractive for businesses to borrow. On a $1 million loan, that’s a $31,500 savings, or $65,000 on a $2 million loan.

As an extra layer of protection, the SBA has also temporarily increased the percentage it guarantees on 7(a) loans from 75% to 90%. That means it’s less risky for banks to lend and gives them greater flexibility to take on risks that may not have been underwritten in the past.

For businesses impacted by the COVID-19 pandemic, the SBA offers debt relief. As a part of the CARES [Coronavirus Aid, Relief and Economic Security] Act, it will pay up to six months of payments – principal and interest – on qualifying loans.

In addition, the American Rescue Plan Act of 2021 created a $28.6 billion Restaurant Revitalization Fund, providing grants to restaurants that suffered financial losses in 2020 due to COVID-related shutdowns and disruption.

PBN: What financial documents or information do businesses need to have on hand to apply for an SBA loan?

GOULD: It’s important to prepare information ahead of time for the application and approval process.

First, be sure to file your tax returns. This makes it easier for the lending officer to review your business’s financial performance. SBA requires lenders to verify that taxes and/or extensions have been filed, so if you haven’t filed, it makes the process more difficult.

Second, know how much you want to borrow. Asking “How much can I get?” won’t work. Lenders want you to share specifics on why you need the loan and how you will use the funds. For example, if you’re looking to renovate your space, be prepared with written quotes from contractors.

It’s also important for you to articulate how COVID has impacted your business. Regardless of how stable your business is now, lenders want to know what steps you took to overcome challenges caused by COVID business restrictions and how you found new ways to keep going despite hardship.

Finally, be honest. Lenders want to work with you and be able to give you the loan you need. Don’t worry if your business lost money last year – but be upfront about it so they understand the situation and have accurate information to make a decision.

PBN: Webster Bank has been recognized as the No. 1 SBA lender in New England. To what do you attribute the company’s strong participation and performance with these loan programs?

GOULD: Webster is a preferred SBA lender, which means we’re able to make our own decisions when it comes to eligibility and approval. We also have a great deal of experience with SBA programs and a deep understanding of the credentials required to apply for specific programs. Our bankers know the rules and nuances, so we can structure loans to best fit the needs of your business. And we pride ourselves on understanding the challenges our customers face, so we’re able to find the right SBA lending opportunities for each unique situation.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.