The Art of SBA Lending

Final Episode: Revisiting My Roots (MCC Reunion) | Ep. 191

This week marks the finale of The Art of SBA Lending podcast, and Ray Drew brings it home by reuniting with his original mentors and colleagues from the era that shaped his career: the Mercantile Capital team. Listen as they reminisce about the "good old days" of 2011–2013, an era defined by reinventing business after the 2008 crash. The panel discusses how Mercantile Capital was built around the niche business of 504 interim lending (an industry they essentially invented). They recall the unique office culture, characterized by healthy competition, daily in-person mentoring sessions, frequent celebration of birthdays, and bizarre marketing tactics (shiny envelopes and stress-ball brains). The alumni highlight the competitive, yet collaborative, environment where young talent was actively taught the business. The episode features hilarious and nostalgic stories, including the infamous "Find My iPhone" conference incident involving a police car and a hungover apartment owner. Tony shares lessons learned from the creative ways he structured deals, while Carolyn explains how she fell in love with SBA lending by serving small business owners. 🎯 In this episode: * The Startup Grind: How the team pivoted after the 2008 crash to focus on the ultra-niche 504 interim lending space. * The Last Chapter of the "Good Old Days": Remembering a pre-virtual, pre-AI era of paper packages, fax machines, and in-person mentorship. * Learning the Ropes: The harsh but valuable lessons learned from veteran lenders, including don't pretend to know the answer and "let's shorten that up a little bit". * Culture, Competition, and Camaraderie: How working together to navigate uncertainty created a special bond and connection within the team. 💬 What's your favorite memory of a mentor helping you out with a deal? Share your story in the comments. 🎙This episode is sponsored by: CORPSMART Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba [https://www.google.com/search?q=https://corp-smart.com/artofsba] and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to support@corp-smart.com to learn more about their services. Rapid Business Plans Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call go to https://rapidbusinessplans.com/art-of-sba

The Chip Mahan Interview: CEO of Live Oak Bank | Ep. 190

This week on The Art of SBA Lending, we sit down with Live Oak Bank CEO and founder, Chip Mahan, to discuss the revolutionary ideas that transformed the SBA landscape. Chip Mahan, who started the bank in 2008, disrupted the existing SBA playbook by focusing on nationwide industry vertical lending. Chip details the bank's founding during the 2008 financial crisis , when he was told by the FDIC to liquidate the bank. He reveals the unique philosophy that led to the bank becoming a top SBA lender, including: rejecting the traditional commission-based compensation model to properly align interests , developing a "theory of verticality" by targeting specialized industries like veterinarians and chicken farmers , and using data from the Freedom of Information Act to determine which industries pay back their loans. He argues that a floating rate 7(a) loan is the "best asset that anybody can put on any bank's books." The episode also covers the bank's commitment to technology, the importance of perfecting the "handoff" between the lender, underwriter, closer, and servicer , and the future of banking in the age of Artificial Intelligence. Chip explains how AI will dramatically affect determining SBA loan eligibility and create an "automatic credit memo". 🎯 In this episode: * Founding Under Fire: The story of getting a bank charter in May 2008 and being told to liquidate the bank in March 2009 by the head of the FDIC in Atlanta. * The Verticality Edge: Why Live Oak focused on niche industries and hired domain experts to create an "unbeatable" credit box. * No Commissions: Why a compensation model based on stock and growth is superior to commissions, citing Charlie Munger's famous quote on incentive plans. * The Future of SBA: Chip's prediction on the future of the 7(a) program and why he believes the loan size limit should be increased to $10 or $20 million. * AI & Banking: How artificial intelligence will automate the credit memo, cash flow analysis, and dramatically simplify SBA eligibility determination. 💬 Do you agree that the floating rate 7(a) loan is the best asset for any bank's books? Let us know in the comments! 🎙This episode is sponsored by: Lumos Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance. If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/ [https://lumosdata.com/] Shatterbox Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba [https://shatterbox.io/artofsba] and set up a discovery call today. Head to http://www.artofsba.com [http://www.artofsba.com] for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

Winding Down a Shop while Battling a Major Health Crisis feat. Heidi Whitesell | Ep. 189

This week on The Art of SBA Lending, we go behind the scenes with Heidi Whitesell to unpack the leadership, culture, challenges, and ultimate wind-down of a successful SBA lending division. Ray Drew sits down with Heidi, who he calls one of the best leaders he's ever worked for, to discuss the philosophy that created a legendary, family-like culture in a fully virtual, non-bank setting. Heidi shares the vision for her former venture, Fund-Ex, which quickly climbed the national rankings without losing its unique team culture. She reveals her leadership principles, including the powerful belief that "love always works," and explains how relentless positivity, transparency, and providing resources ahead of revenue were the keys to their success—even in a highly complex industry. The conversation takes a raw and emotional turn as Heidi opens up about navigating the intense, uncertain process of a company sale and eventual wind-down while privately battling a serious health crisis, revealing why she chose to stay and fight for her team. 🎯 In this episode: * The Vision for Culture: How a fully virtual SBA team built a top-25 lending operation with a "family" culture using the principles of People, Process, and Product. * Leadership Secrets: The power of transparency, collaboration, and why staying positive and putting the team first are non-negotiable for a leader. * The Resource Strategy: Why investing in resources before revenue is essential for speed and service, and how this investment combats costly employee turnover. * The Ultimate Test: Heidi's emotional account of leading the company through the stress of a sudden sale, a liquidity crisis, and the difficult process of a year-long wind-down. * A Leader's Sacrifice: The incredible story of how a commitment to her team kept her fighting while undergoing chemotherapy. 💬 What do you think is the hardest part about building a strong culture in a virtual environment? Share your thoughts below! 🎙This episode is sponsored by: CORPSMART Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba [https://www.google.com/search?q=https://corp-smart.com/artofsba] and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to support@corp-smart.com to learn more about their services. Rapid Business Plans Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba [https://rapidbusinessplans.com/art-of-sba]. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers. Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShowhttps://www.youtube.com/@SBATo%3C18%3Edayhttps://www.youtube.com/@TheBDOShow [https://www.youtube.com/@TheBDOShow] https://www.youtube.com/@SBAToday [https://www.youtube.com/@TheBDOShowhttps://www.youtube.com/@SBATo%3C18%3Eday] Head to http://www.artofsba.com [http://www.artofsba.com] for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

USDA Lending: The Last Frontier? feat. Jason Hoerr, Steve Small, & Charles Conoley| Ep. 188

This week on The Art of SBA Lending, we explore the world of USDA Business & Industry (B&I) lending, often considered the "last frontier" of government-guaranteed small business finance. Host Ray Drew, who admits to knowing very little about the program, is joined by a panel of USDA experts—Steve Small, Jason Hoerr, and Charles Conoley—to demystify this often misunderstood loan program. The panel provides a deep dive into the B&I program, which is designed to stimulate economic activity and job creation in rural areas (populations of 50,000 or less). They reveal key advantages over the SBA 7(a), including larger loan amounts (up to $25 million), 30-year terms on real estate, and eligibility for investment real estate and non-profits. We tackle the common misconception that USDA loans take forever, clarifying that acquisitions can be approved in 2-4 weeks after bank approval. The panel explains why the USDA culture is fundamentally different from the SBA, acting more as a participant in a conventional loan rather than a strict insurer. Finally, we dive into the controversial question: Should the USDA B&I program be absorbed by the SBA? 🎯 In this episode: * An overview of the USDA B&I program and its mission to create jobs in rural communities. * Why the USDA guarantee of 80% up to $25 million is a "magic bullet" for rural commercial finance. * The big cultural difference between USDA and SBA, and why USDA almost never repairs a guarantee. * The value of a loan packager in navigating the "never-ending" nuances of state-by-state USDA processes. * The biggest pain points: from outdated environmental regulations to staffing upheaval and inconsistent policy. 💬 Should the USDA B&I program be absorbed by the SBA? Let us know your thoughts in the comments! 🎙This episode is sponsored by: Lumos Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance. If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/ [https://lumosdata.com/] Shatterbox Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba [https://shatterbox.io/artofsba] and set up a discovery call today. Head to http://www.artofsba.com [http://www.artofsba.com/] for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending. Also, make sure to follow along with our sister shows, The BDO Show and SBA Today.

Money Store Reunion feat. Joe Weiner, John Handmaker, Sam Renta, & Vince Calicchia | Ep. 187

This week on The Art of SBA Lending, we're doing something special: a Money Store reunion episode. The Money Store pioneered the Business Development Officer (BDO) model and revolutionized the SBA lending industry, holding the top position for 16 consecutive years. Host Ray Drew brings together four Money Store alumni-John Handmaker, Vince Calicchia, Joe Weiner, and Sam Renta-to share stories and insights from the company that changed SBA lending forever. The panel reminisces about the legendary BDO boot camps, the company's aggressive marketing, and its commitment to a sales-driven culture. They discuss what made The Money Store so successful and how that culture has influenced a generation of SBA lenders. From Mark Turtletaub's visionary leadership and theatrical flair to the infamous "Purple Palace," the alumni provide a rare glimpse into the "good old days" of SBA lending. The episode also features a surprise appearance from Mark Rattfield, a former underwriter who became a successful BDO after being inspired by a colleague's W-2 form. 🎯 In this episode: * The origins of The Money Store and how they became the number one SBA lender in the country. * The "sensationalized" marketing that made them famous, including co-branded signs and the BDO boot camp. * The "cookie story," a lesson in focusing on a company's specific credit box. * How a sales-driven culture and a shared vision created a sense of purpose and synergy among the team. * The big difference between SBA lending then and now, from paper packages to referral fee culture. 💬 What's your take on the referral fee debate? Did The Money Store-era BDOs have it better, or are today's lenders more equipped for success? Join the debate in the comments. 🎙This episode is sponsored by: CORPSMART Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba [https://www.google.com/search?q=https://corp-smart.com/artofsba] and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to support@corp-smart.com to learn more about their services. Rapid Business Plans Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba [https://rapidbusinessplans.com/art-of-sba]. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers. Link to "A day in the life" video: https://youtu.be/qZO7ihtehkU?si=sc-DvfagqqyBlBb8 [https://youtu.be/qZO7ihtehkU?si=sc-DvfagqqyBlBb8] Link to "Mad to make loans" music video: https://youtu.be/gwRa3MKXe6g?si=w5eCh_WPdLVj_YNf [https://youtu.be/gwRa3MKXe6g?si=w5eCh_WPdLVj_YNf] Join Ray and some of the Money Store alum LIVE on LinkedIn September 26th at 3pm ET for a trip down memory lane: Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShowhttps://www.youtube.com/@SBATo%3C18%3Edayhttps://www.youtube.com/@TheBDOShow [https://www.youtube.com/@TheBDOShow] https://www.youtube.com/@SBAToday [https://www.youtube.com/@TheBDOShowhttps://www.youtube.com/@SBATo%3C18%3Eday] Head to http://www.artofsba.com [http://www.artofsba.com] for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.