Minority Business Commission JLARC Report -
Description: Minority Business Commission JLARC Report - Response Update Presented by: Howard F. Pisons, Executive Director September 27, 2021 Adress the fundamental need for small, women owned and minority owned businesses to obtain access to capital
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slide1. Minority Business Commission JLARC Report - Response Update Presented by:
Howard F. Pisons, Executive Director September 27, 2021<br>
slide2. Adress the fundamental need for small, women owned and minority owned businesses to obtain access to capital HOW:
Offer loans to small businesses and child care providers
Offer loans to small businesses in EDA/IDA projects to attract or retain them
Help small businesses obtain loans from banks
Incentivize investors to invest in small businesses<br>
slide3. Howard F. Pisons Joined VSBFA 9/30/2019
36 years of prior business and banking know how
16 years Community Bankers’ Bank (Richmond, VA 2002-2018)
16 years National Banks (Chicago, IL 1984-2000)
4 years Multinational Corporations (CA, IL 1980-84)<br>
slide4. New Positions added this year!
Accounting and Operations Manager
SSBCI Grant Manager
Open Positions filled this year
Executive Assistant
Open Positions (in process)
Regional Lending Manager
Future Positions (on the drawing board)
Sales Team Manager
Loan Administration Specialist
Portfolio Specialist
Grant Specialist ORGANIZATION<br>
slide5. JLARC Report of August 2020 – Recommendations Status Update<br>
slide6. Recommendation 6: Set annual utilization goals for each program 90% utilization target
Goals are uniquely tied to each program type, economic and lending environment, capacity and resources
Strategies to establish annual goals and increase utilization for each VSBFA program is under development. Steps underway:
Resource capacity assessment (underway/finalize with Oct EWP process)
Add capacity – Fill regional lending manager position (underway/finalize Oct)
Increase – Borrowing limits (underway/finalize 10/12)
Decrease – Borrowing costs (complete)
Develop – New products (on-going)
Amplify Awareness – Webinars, social media, website (planning phase)
Amplify Awareness –SBM, MBL, AWBO, VBA, SBDC, RFBR (on-going leveraging partnerships)<br>
slide7. Recommendation 7: Regularly track utilization and report to the Board annually A “Dashboard” to report program utilization was accepted by the Board on 4/13/2021
The Dashboard will evolve with other key success drivers for reporting to the Board
The Dashboard is presented to the Board quarterly; next due 10/12/2021<br>
slide8. Recommendation 8: Develop policies and risk standards that reflect the public mission for Board approval A comprehensive Credit Policy Manual (“Policy”) was presented to the Board on 9/14/2021 for review
Additional review will be conducted on 10/12/2021 to approve the Policy
The Policy will be updated and approved annually by the Board
The Policy is comprehensive and responds to JLARC recommendations: #9, #10, #11 and #12<br>
slide9. Recommendation 9: Develop a risk assessment tool for Board approval A loan Risk Rating System (RRS) was developed and accepted by the Board on 4/13/2021
The RRS is a component of the Policy which will be reviewed and approved by the Board annually
The loan portfolio has been risk rated and is being managed accordingly<br>
slide10. Recommendation 10: Conduct a risk based review and report finding to the Board at least annually All program transactions have been risk rated according to Policy
Annual transaction reviews will be performed according to Policy; risk ratings will be assessed and updated at that time
Transactions risk rated Substandard (6) or worse will be reviewed with the Board quarterly
A risk assessment summary of the total portfolio will be reported to the Board annually<br>
slide11. Recommendation 11: Require banks to report high risk loans in the formal agreements “High risk loans” are primarily bank loans in our guaranty programs
How we mitigate:
Policy requires us to underwrite and monitor them “like we are the lender”
Subject to annual review according to Policy
Subject to quarterly review if we risk rate them Special Mention or worse
Will set monitoring expectations with banks accordingly
Our transaction agreements currently require banks to notify us of any material adverse change(s) in the credit<br>
slide12. Recommendation 12: Establish timeframes to process loans; track and report results Established turnaround standards for transaction screening, underwriting and approval
Timeframes are based on controllable actions (screening, underwriting, approval)
Timeframes begin when the requested information and answers are received for each processing stage and recorded
Timeframe standards are goals in the Employee Work Plan<br>
slide13. Recommendation 12: Identify Timeframes for Application Process Application RLM Screening - 2 days Underwriting - 5 day CCO Review / Approve Underwriting - 2 days Approved CCO Screened CCO Review/Approve Approved Microloan & Child Care EDLF, CCP & LGP<br>
slide14. Recommendation 14: Establish a program improvement plan to address report deficiencies Account to the board quarterly, annually and as needed
Adhere to Credit Policy; establish new policies and procedures as warranted
Fill open Regional Lending Manager position
Continue to right size the organization
Develop annual program utilization goals (#6)<br>
slide15. PIVOT - Post State of Emergency Organization – Fill open positions (in-process/finalize Oct); right size staff (on-going)
Upgrade – Financial & accounting, grant management, loan operating systems (separate-stages)
Upgrade – Salesforce (Go-Live 10/4) (track all aspects of goal and process management)
Upgrade – DocuSign (Go-Live 11/30) (all program documentation)
Upgrade – Public Relations and Marketing Manager (complete)
Amplify Awareness – Social media, website, webinars (planning phase)
Amplify Awareness – SBM, MBL, AWBO, VBA, RFBR, SBDC (on-going - leveraging partnerships)
Increase – Borrowing limits (partially complete/finalize 10/12)
Decrease – Borrowing costs (complete)
Develop – New products (in-process)<br>
slide16. State of Emergency<br>
slide17. Rebuild VA Grant Program – $120 Million (2020) / $25 Million (2021)
Program to Date as of 9/22/2021:
Total Amount Awarded $139,239,908
Total Grants Awarded 3,474
Average Grant Award $40,081
Low Income Community Awards (58.44%) $81,371,632
Minority Awards (31.99%) $44,540,008
Woman Owned Awards (32.12%) $44,727,223
Applications in the Pipeline 9,000<br>
slide18. Grant Award Map Interactive map available at:
https://www.governor.virginia.gov/rebuildva/<br>
slide19. On the Horizon $250 Million Rebuild VA Grant Program (Imminent)
$188 Million State Small Business Credit Initiative (Q1 2022)<br>
slide20. Questions? Howard F. Pisons Howard.Pisons@sbsd.virginia.gov
www.sbsd.virginia.gov Executive Director Angela M. Reese Angela.Reese@sbsd.virginia.gov
www.sbsd.virginia.gov Executive Assistant<br>
Howard F. Pisons, Executive Director September 27, 2021<br>
slide2. Adress the fundamental need for small, women owned and minority owned businesses to obtain access to capital HOW:
Offer loans to small businesses and child care providers
Offer loans to small businesses in EDA/IDA projects to attract or retain them
Help small businesses obtain loans from banks
Incentivize investors to invest in small businesses<br>
slide3. Howard F. Pisons Joined VSBFA 9/30/2019
36 years of prior business and banking know how
16 years Community Bankers’ Bank (Richmond, VA 2002-2018)
16 years National Banks (Chicago, IL 1984-2000)
4 years Multinational Corporations (CA, IL 1980-84)<br>
slide4. New Positions added this year!
Accounting and Operations Manager
SSBCI Grant Manager
Open Positions filled this year
Executive Assistant
Open Positions (in process)
Regional Lending Manager
Future Positions (on the drawing board)
Sales Team Manager
Loan Administration Specialist
Portfolio Specialist
Grant Specialist ORGANIZATION<br>
slide5. JLARC Report of August 2020 – Recommendations Status Update<br>
slide6. Recommendation 6: Set annual utilization goals for each program 90% utilization target
Goals are uniquely tied to each program type, economic and lending environment, capacity and resources
Strategies to establish annual goals and increase utilization for each VSBFA program is under development. Steps underway:
Resource capacity assessment (underway/finalize with Oct EWP process)
Add capacity – Fill regional lending manager position (underway/finalize Oct)
Increase – Borrowing limits (underway/finalize 10/12)
Decrease – Borrowing costs (complete)
Develop – New products (on-going)
Amplify Awareness – Webinars, social media, website (planning phase)
Amplify Awareness –SBM, MBL, AWBO, VBA, SBDC, RFBR (on-going leveraging partnerships)<br>
slide7. Recommendation 7: Regularly track utilization and report to the Board annually A “Dashboard” to report program utilization was accepted by the Board on 4/13/2021
The Dashboard will evolve with other key success drivers for reporting to the Board
The Dashboard is presented to the Board quarterly; next due 10/12/2021<br>
slide8. Recommendation 8: Develop policies and risk standards that reflect the public mission for Board approval A comprehensive Credit Policy Manual (“Policy”) was presented to the Board on 9/14/2021 for review
Additional review will be conducted on 10/12/2021 to approve the Policy
The Policy will be updated and approved annually by the Board
The Policy is comprehensive and responds to JLARC recommendations: #9, #10, #11 and #12<br>
slide9. Recommendation 9: Develop a risk assessment tool for Board approval A loan Risk Rating System (RRS) was developed and accepted by the Board on 4/13/2021
The RRS is a component of the Policy which will be reviewed and approved by the Board annually
The loan portfolio has been risk rated and is being managed accordingly<br>
slide10. Recommendation 10: Conduct a risk based review and report finding to the Board at least annually All program transactions have been risk rated according to Policy
Annual transaction reviews will be performed according to Policy; risk ratings will be assessed and updated at that time
Transactions risk rated Substandard (6) or worse will be reviewed with the Board quarterly
A risk assessment summary of the total portfolio will be reported to the Board annually<br>
slide11. Recommendation 11: Require banks to report high risk loans in the formal agreements “High risk loans” are primarily bank loans in our guaranty programs
How we mitigate:
Policy requires us to underwrite and monitor them “like we are the lender”
Subject to annual review according to Policy
Subject to quarterly review if we risk rate them Special Mention or worse
Will set monitoring expectations with banks accordingly
Our transaction agreements currently require banks to notify us of any material adverse change(s) in the credit<br>
slide12. Recommendation 12: Establish timeframes to process loans; track and report results Established turnaround standards for transaction screening, underwriting and approval
Timeframes are based on controllable actions (screening, underwriting, approval)
Timeframes begin when the requested information and answers are received for each processing stage and recorded
Timeframe standards are goals in the Employee Work Plan<br>
slide13. Recommendation 12: Identify Timeframes for Application Process Application RLM Screening - 2 days Underwriting - 5 day CCO Review / Approve Underwriting - 2 days Approved CCO Screened CCO Review/Approve Approved Microloan & Child Care EDLF, CCP & LGP<br>
slide14. Recommendation 14: Establish a program improvement plan to address report deficiencies Account to the board quarterly, annually and as needed
Adhere to Credit Policy; establish new policies and procedures as warranted
Fill open Regional Lending Manager position
Continue to right size the organization
Develop annual program utilization goals (#6)<br>
slide15. PIVOT - Post State of Emergency Organization – Fill open positions (in-process/finalize Oct); right size staff (on-going)
Upgrade – Financial & accounting, grant management, loan operating systems (separate-stages)
Upgrade – Salesforce (Go-Live 10/4) (track all aspects of goal and process management)
Upgrade – DocuSign (Go-Live 11/30) (all program documentation)
Upgrade – Public Relations and Marketing Manager (complete)
Amplify Awareness – Social media, website, webinars (planning phase)
Amplify Awareness – SBM, MBL, AWBO, VBA, RFBR, SBDC (on-going - leveraging partnerships)
Increase – Borrowing limits (partially complete/finalize 10/12)
Decrease – Borrowing costs (complete)
Develop – New products (in-process)<br>
slide16. State of Emergency<br>
slide17. Rebuild VA Grant Program – $120 Million (2020) / $25 Million (2021)
Program to Date as of 9/22/2021:
Total Amount Awarded $139,239,908
Total Grants Awarded 3,474
Average Grant Award $40,081
Low Income Community Awards (58.44%) $81,371,632
Minority Awards (31.99%) $44,540,008
Woman Owned Awards (32.12%) $44,727,223
Applications in the Pipeline 9,000<br>
slide18. Grant Award Map Interactive map available at:
https://www.governor.virginia.gov/rebuildva/<br>
slide19. On the Horizon $250 Million Rebuild VA Grant Program (Imminent)
$188 Million State Small Business Credit Initiative (Q1 2022)<br>
slide20. Questions? Howard F. Pisons Howard.Pisons@sbsd.virginia.gov
www.sbsd.virginia.gov Executive Director Angela M. Reese Angela.Reese@sbsd.virginia.gov
www.sbsd.virginia.gov Executive Assistant<br>