Like most aspects of banking, small business loans are no longer just about the financial agreement between the bank and the customer, but the personal attention that comes before and after the service. That’s a recurring theme among online lenders, but it’s also the view of Wells Fargo’s Lisa Stevens, president of western region regional banking.
Last year, the bank launched its own online lending product, FastFlex, in response to not only new competition from the likes of OnDeck Capital and Bond Street, but to its own customers asking for ease of access to loans, ease of use and guidance. Now it wants to open that product beyond Wells Fargo customers.
Based on the latest Community Reinvestment Act data released in 2016, Wells Fargo extended 473,847 loans and $21.3 billion in total loan originations under $1 million to U.S. small businesses that year. It is the top ranking U.S. small business lender by dollar amount.
Tearsheet caught up with Stevens about how Wells Fargo approaches small businesses and what competition from alternative lenders mean for the bank.
Wells Fargo is the number one SBA lender in dollars. What’s your focus?
It depends on customers, what their need is at the time. But our focus has been about being where our customers need to be and making it easy for them. The business encompasses a lot because it’s about trying to see things from perspective of a small business owner versus the perspective of the institution.
What’s the perspective of the institution, historically speaking?
From the 2008 recession to a couple years ago we knew diverse-segment small businesses were struggling more than they had prior to 2008. We did a study with Gallup to understand what are the pain points for Asian-, Hispanic-, African-, women- and veteran-owned businesses and what could we do to help revitalize these businesses at a faster rate.
What did you learn?
Small business owners know everything about their businesses but don’t necessarily know what they need to do to make sure they put all the right financial instruments and advice into place. We created four initiatives and one was to help with credit coaching.
What does that entail?
We call people that get declined and walk them through what happened, why they got declined and what they need to do to get approved. When small business owners they get declined for a line of credit or loan they often don’t know why. At the time we were the only financial institution to do something like this. FastFlex was also an answer to what some in the market were looking for.
It was that ability to control your inventory or be able to move quickly on something when you have an opportunity and you need to get credit quickly. With FastFlex, we came together and made the decision to basically disrupt the disruptors, create a product we knew would be competitive and easy access for our customers with the capabilities we had. But we did it fast. We’ve got more piloting the line of credit right now. Now we’re looking to offer Fast Flex to new customers who don’t have a history with us.
Is your business threatened by online lenders?
It’s a competitive market but thats a good thing for small businesses. All the online products that have come out have been a positive thing for small business owners because it’s given them more choices and opportunities. And it’s allowed us to sit back and rethink how we’re creating the best tools and advice.
What about Amazon?
Companies like Amazon, Zappos — they’re all fantastic opportunities for us to understand what’s the experience we should be creating for the business owner or customers and to be able to learn from others innovating.
How do you measure success?
There are financial metrics, the number of customers we’re reaching, how we continue to innovate and be responsive to a world that’s changing so quickly. We also have surveys based on what our customers are saying. The anecdotal success is just as important.