Age: What is my age let's see I was in born in 46 so I guess that makes me 55.
Family: Wife Linda, a son and daughter
Home: Middletown New Jersey
Occupation: Chief of Finance and Group Leader for the small Business Administration New York office
First job: I was a teller in 1965 at the Franklin National Bank in Brooklyn
Most vivid food and wine memory: There was this great Northern Italian place in Brooklyn called Joe's I had some of the best meals of my life there. Frank and George Genoves were truly talented I got to know them pretty well when the restaurant moved across the street from my office. I used to bring my girlfriends there they'd always bring out dishes that weren't on the menu-very impressive. They made an angel hair with vodka sauce that was to die for.'
Mottoes by which I work: Always put in a day and a half's worth of work. I always come in early and though I don't stay as late as I used to manage to put in about 10-12 hour days. Always give them more than what they expect.
Small businesses represent 99.7% of all employers and 96% of all U.S. exporters. our country is built on the small business community. These same start-up companies rely on commercial funds to get ahead. But it's not always as easy as walking into a bank and asking for money especially when you are a first time applicant with no established track record or minor debt. For this reason the Small Business Administration (SBA) a federal agency was created in 1953 to "maintain and strengthen the nation's economy by aiding counseling assisting and protecting the interests of small busts ness concerns and by helping families and businesses recover from natural disasters. Today the SBA represents the single largest financial backer of small businesses in the United States. After nine years as the Chief of Finance for the SBA New York office Joe Guarino is a mentor to any business just starting out. He has worked as a commercial loan officer since 1975 many of his clients restaurateurs. Though he has worked at the local bank branch in Brooklyn and rubbed elbows on Madison Ave. Guarino has always maintained that his business is about people not money. His start was humble however Guarino was fortunate to have found his own mentor at an early age. After I graduated from high school in 1964. I spent a few months. in college but decided that I was a Brooklyn street kid and they didn't go to college. Guarino explains instead he waited at home for his draft card to come in and worked in the neighborhood bank as a teller "I finally got the call, and I failed the physical. I failed it three times," Guarino recalls. He continued at the bank and in a matter of three months was promoted to chief clerk. Within a few years he was promoted again, becoming the bank's youngest corporate manager. "It wasn't the norm in those days, to be promoted so fast. Guarino admist. "You used to have to be trained for several years and sit on the bench before getting a promotion. Nowadays banks make every body a v.p who's right out of college
Though he took to the banking industry quite naturally, he was encouraged to pursue a higher education. In between his fourteen hour days, at the behest of his menton. Guarino attended college in the evenings. He completed his undergraduate degree and MBA over the course of eight years. While I was learning the bank business, my mentor Frank Bentante taught me to read between the lines--to get to know people." The continues. "Today it's all black and white all about business." For this reason. Guarino felt the structure of large banks was not for him; there were too many procedures. I wanted to work independently, where I could get to know the people who were applying for the loan." Guarino explains. He moved to nice small bank where he managed the Brooklyn and Fort Hamilton branches. His final move brough him to the Public National Bank in New York where he remained for thirteen
years. It was at these two banks that Guarino got into the lending business. Today Guarino assists the SBA to ensure that young entrepreneurs are given their opportunity to succeed.
Q: How did you become involved with the Small Business Administration (SBA)?
A: While working in the banking business. I was always among the top three performing officers. But each year they 'raised the bar' of what was expected. It began to wear on me. I was in D.C. on business and met a gentleman who was a regional administrator for the SBA. He told me about the organization. A few months after I returned to New York we spoke again and discussed my coming to work for the SBA. I decided it was time to leave while I was still on top of the game. Although I didn't want the responsibility of a big office--nine years later. I'm an SBA loan manager.
Q: Who should apply for a business loan?
A: Anyone who wants to borrow over $150,000. It is not economically feasible for banks to lend money than that fact on a $150,000 loan the bank will just break even. Anything less and they loose money. It's not as simple as the bank giving you the money and ranking in all that great interest. There's a lot of holding at the beginning, the banker must service and review the account throughout the term of the loan.
Q: So what are my options if I only want to borrow much less?
A: Go to friends and family for a few dollars $500-3,500. We also now have micro lenders which are great for small loans of a few thousand dollars. The SBA will match the amount of the miero-loan with grant money when possible.
Q: What makes an applicant desirable to a loan officer?
A: Practical knowledge and experience working under a successful business yould be amazed some people don't understand what experience is I had one applicant who truly believed he was a qualified applicant because his restaurant experience was eating in restaurants every day. "He has no idea of what it takes to make that restaurant run So, look for hands on experience and someone who has a realistic idea of the work involved. I look for how well the applicants understand their business, how clear their goals are and if they know where they want to be in a year.
Q: How does one find the right place to get a loan?
A: Small bank branches make it easier on the applicant. They get to know the people involved. There is a saving. Financial statements don't pay back loans people do it is important for the loan officer to believe this Pennsylvania Central Railroad is a good example though they had a great balance sheet and income statement they went bankrupt. But the type of person who feels an obligation to pay his loan will I knew one guy who took seven years to pay back a loan but he paid it back in full and brought a cake on the day of his last payment. Those are the people you want to lend money to.
Q: So small banks are more likely to give loans?
A: Well, it depends on the method of evaluation the bank uses Credit scoring is used for small loans [under $100,000]. The process is less time consuming, but it is a numerical black and white look at your credit history. It doesn't take into account the intangibles like what type of business you're opening or what type of potential for success exists.
Loan officers on the other hand are used for large loans [$100,000 $750,000]. These applications are presented to the bank's loan committee. Where all facets of the business are considered. This process takes more time and decisions are subject to personal opinions this may work to the applicant's advantage or disadvantage it's important to know how much authority your loan officer has.
Q: How does the SBA choose lenders?
A: The SBA has an approved system to evaluate banks. We look at the management experience and track record of each bank. We current have 142 lenders. Eighty of those will actually make the loans. The hardest part is finding the lenders because many of our loan applications have what the banks consider rough edges. But that's why we back up every loan
Q: How does the SBA do that?
A: The SBA underwrites small business loans from commercial lenders we guarantee that 85% of the loan will be repaid.
Q: What type of loans suits most first timers?
A: A loan in the five to seven year range, with a six month interest only payment option if possible it's hard to find banks that will give this kind of loan but it provides some grace time in which only the interest must be paid. The longer the term of the loan of course the easier it is to pay back the term of most business loans is one to three years.
Q: Is it easier for a retail food business than a restaurant to get a loan?
A: Today it costs about $500,000-S1,000,000 to open a restaurant and $1-$2 million in New York City. When lending money for a new restaurant, the bank will want the lender to contribute one-third of the money required. Banks don't want to spend millions on a restaurant. When calculating the loan for a sit down restaurant it is harder to establish the monetary needs you must be both practical and realistic. A McDonald's or any tranchise for example is a little easier you can borrow more because there is an established track record an established track record
Q: What type of assistance does the SBA offer?
A: We provide a program called the Service Corps of Retired Executives. SCORE is made up of volunteers who have retired from successful careers and want to give back to the business world. They sit down with applicants help them construct a business plan and go over all the permits, licenses, and paper work required. They will point out all the pitfalls that the applicants may not see until it's too late. The SBA Development Center will help the applicant form a coherent business plan. They will also refer the applicant to a lender
Q: What will give applicant an added advantage when applying for a loan?
A: A well thought out business plan. Know your market expenses, the type of equipment consider and be prepared how you intend to pay for it A well thought out business plan is crucial.
The Business Plan
* Consider the cost to start, potential market, location employees needed what is the employee structure, and what are the key positions.
* Define your mission statement, concept, and type of business what is your management style, are you forming a partnership or a corporation, what service or product do you pro vide, who is your market, and how will you appeal to them
* Discuss production amounts, schedules, equipment
* Project your financial goals create a two and five year plan for yourself and ultimately for the potential lender
* Research your competition locally, regionally and nationally Standard & Poor's provides detailed information about businesses in specific regions.
* Research your demographics the fibrary is a good place to start.
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|Title Annotation:||small business loans|
|Date:||Jun 22, 2001|
|Next Article:||MAKING THE GRADE.|