I recently ran into Mtaalamu Acey, who had worked his way through our Rutgers MBA program with a job in our Small Business Development Center in Newark.
"What are you doing now?" I asked.
"I consult with small businesses to help them get bank loans."
Immediately I thought Mr. Acey could offer insight on why some banks do well in small-business lending and others do not.
Mr. Acey and people like him can be a source of minority loans that can enable banks to better serve their communities and meet Community Reinvestment Act requirements to boot.
In addition, he represents the type of well-trained, enthusiastic African-American that most banks are dying to recruit but cannot keep. Why? Many end up preferring being in business for themselves to working in a large organization.
I remember seeing a top African-American graduate of our program who had gone to Manufacturers Hanover Corp. Within five years she was heading the department that lends to airlines to finance purchases of Boeing 747s.
When I saw her three years later I asked, "How's the bank treating you?"
"Oh, I quit the bank," she said. "I own a McDonald's, and I have never had more fun in my life."
Many minority people want to be in business for themselves, and Rutgers has programs like the Minority Small Business Investment Cos. to help them. But small business is far tougher than working in a larger group-you have to be an expert on finance, marketing, personnel, and everything else. It requires a lot more training.
On the finance side of this learning process, Acey Consulting and Information Systems, based in South Orange, N.J., works to bridge the gap.
Mr. Acey gets clients from banks, Small Business Development centers, community speeches on financing your business, and word of mouth. His job is to supply the know-how that prospective business owners need to get Small Business Administration loans.
He helps them prepare business plans, gather documents, generate credit history, and understand what collateral they have and how it can help them gain SBA loan approval.
Much of his day is spent throwing cold water on plans. Too many people feel that an SBA loan is a grant to pay their living expenses while they learn a new field.
Mr. Acey quickly dashes that idea. Someone coming in to finance a pizza parlor will probably be told to go work in one for a year and learn what is involved.
Only when Mr. Acey sees tax returns and feels the person has the needed skills, can provide the capital the bank wants, and has a realistic plan for cash flow from the operation will he send the customer to a bank.
It's important that Mr. Acey know the banks well. Many are just plain cold to his type of client. A few others stand out in his mind and experience as solid small-business lenders.
"What could banks do to make your job easier?" I asked.
"First, be quick in responding. A quick 'no' is appreciated more than a slow 'yes,'" he said.
"Second," he said, "be helpful. Don't just run down a loan if you don't like it. State what your bank wants done to make it bankable, if possible."
As for the race of the borrower, Mr. Acey said, it doesn't matter today. More important is commitment and ability to make the business flourish.
Mr. Acey's track record is essential to getting referrals and then placing loans with banks. In his business, where fees must be small and he takes no "piece of the action," volume is the only way he can survive.
Still, he feels that when he does his job right, it is a win-win situation. He gets clients, and banks get both a place to refer people who want loans but are not yet bankable and access to those customers when they are qualified to borrow.