John L. Guy Jr., the new head of First Union Corp.'s small-business lending division, says he isn't worried that the unit recently lost its No. 1 ranking in Small Business Administration lending.
"My definition of No. 1 one is much broader than just what the SBA says," said Mr. Guy, who was named president of First Union Small Business Capital last week. "If we can become a leading lender to small businesses in terms of profitability and service, and a place where employees can reach their goals, then we have been successful."
For 16 years the small-business unit - which was known as the Money Store Commercial Lending Division until First Union bought its parent in June 1998 - held the top spot on the Small Business Administration's ranking. In the fiscal year that ended Sept. 30, however, Chicago-based Heller Financial Inc. leaped past it to claim the top spot, according to SBA figures released last month.
Heller closed $536.5 million in SBA 7(a) loans in 1999, up 66% from last year. First Union closed $414.1 million, down 4%. Heller attributed much of its surge to its work targeting businesses in the East, where the company had never done business before. First Union said its drop occurred because it was devoting more resources to non-SBA-backed loans to small companies.
Mr. Guy, 46, came to First Union from Heller and is expected to work on marketing other products to small-business customers, just as he did in Chicago. At Heller he was working on ways to sell factoring, credit lines, and long-term financing for real estate and equipment acquisitions to current SBA-loan borrowers.
"With his extensive experience in this important market segment, he brings the visionary and energetic leadership needed to make First Union the premier small business financial services provider in the country," said Thomas H. Pacer, head of First Union's Commercial Banking Group.
Mr. Guy said that by offering First Union products such as checking accounts, cash management, payroll, and leasing, he believes he can use the bank to gain a competitive advantage.
"Small businesses don't have chief financial officers," said Mr. Guy, who succeeded Paul Leliakov, who retired early this year. "If we can help the entrepreneur with the financial areas, we allow him to do what he is good at."
Mr. Guy said he believes that his customers are longing for that sort of personal attention.
"When you get down to it, this is a people business," he said. "If you understand the borrower's needs and help them solve their problems, they will stay with you."
And if he is successful, he said, he is confident that it will translate into new business for other divisions of the $235 billion-asset parent company.
"By combining the resources of First Union and the old Money Store franchise, we can start relationships with entrepreneurs that will grow as their businesses grow," he said. "We want to create an evolutionary product that can support the customer all the way up."