Citigroup's (NYSE: C) new head of small business banking knows the excitement and pitfalls of the entrepreneurial landscape firsthand.

Early in his career as a banker, Jerome Byers owned a barbershop and beauty salon on the side.

"I went into it and said 'Ok, I can run this business and turn a profit, it's in a great location.' But I quickly learned that I needed more access to capital. First thing I did was set up a line of credit," Byers said in an interview Tuesday.

But he soon realized that running a small business demands more than just easy financing.

"As I got into the business, I realized that more important than the line of credit was, 'How do I get more customers in? How was I going to stay up to date on regulations and ensure I had the proper licenses? Most consistently in my dealings with the bank on that side, how did I get my money back and forth at the bank quickly so my people and bills get paid?" he adds.

Now Byers, age 44, is on the other side of the equation, figuring out how to attract creditworthy borrowers amidst a struggling economy. Citigroup named him to his new position late last month.

"The climate for business owners at every level is intense and I think that's going to continue. I think business owners are going to continue to look for ways to market their product and increase their sales," he says, adding that owners want to get "better at hiring employees, and more competitive at retaining employees."

Competition to lend to the strongest borrowers is also heating up among banks, even as Citi builds toward its 2011 public commitment to lend $24 billion to small businesses by 2013.

"Banks, as always, are challenged to get in front of businesses and clearly understand their needs," Byers says. "Service is a commonality across the [banking] business…. When you can get in front of businesses and clearly understand their needs, and find multiple ways to solve their needs, you're going to be successful."

He joined Citigroup about a year ago as the bank's central region president, after almost two decades at First Union, Wachovia and Wells Fargo (WFC), where he worked in numerous roles in retail, commercial and business banking. (First Union and Wachovia merged in 2001 and Wells Fargo bought Wachovia in 2008.)

Looking forward, keeping the lending process simple for borrowers will be one important goal, according to Byers.

"When you are a business owner you have limited time," he says. "The simpler you can make it as a banker, the better and more appreciated you're going to be. Simple and easy to do business with is important."

Byers, who is based in Chicago, will also continue to oversee Citigroup's central region in addition to his new role running small business lending. He says he sees important overlaps between the two positions.

"I get to maintain my position in the market in front of customers every day, and stay close to their need and responses," he says. "Sometimes you should be looking at the customer holistically, both as a person and as a business and helping them solve all their needs."

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