April 4, 2016
Main Street Monday — Small Business Fin Tech Lenders Form Alliance Ahead of CFPB Ruling
By Bob Coleman
Editor, Main Street Monday
Episode 18 — Tom Sullivan, Executive Director for the Coalition for Responsible Business Finance
Welcome to Coleman’s Small Business Lending Podcast with your host Bob Coleman.
Today’s guest is Tom Sullivan, Executive Director for the Coalition for Responsible Business Finance.
The Coalition for Responsible Business Finance (CRBF) is a group of businesses and service providers that advocate for the value of nontraditional lending opportunities for small businesses.
Mr. Sullivan is an attorney in the government relations practice of Nelson Mullins Riley & Scarborough, LLP in Washington, DC.
Previously, upon confirmation by the Senate in 2002, Mr. Sullivan served as the highest­ranking government official charged with exclusively advocating the views and needs of small business before government agencies and Congress.
Bob Coleman: Non-traditional sources of capital provide small businesses with the ability to start, grow, and thrive in the economy. Small business owners expect and deserve choices for credit and we at the coalition believe that a better understanding of non-traditional small business lending will lead to greater acceptance by customers, regulators, and local state and federal elected officials says Tom Sullivan, Executive Director of the Coalition for Responsible Business Finance. Tom, welcome. By the way, another shut out. You were formerly with the SBA with the Office of Chief Advocacies, so welcome. What is that statement all about? Tell us what’s going on.
Tom Sullivan: Well, Bob, I couldn’t have said it better myself. I did say it, so –
Bob Coleman: You did, yes. It says Sullivan says right there, okay.
Tom Sullivan: Yeah, it’s really just – this is an answer to the curiosity that Washington has about non-traditional small business lending. The good news is that Washington, D.C. policymakers and Congress and in federal agencies are curious about non-bank lending, alternative lending, thin tech lending, all those different terms. So that’s the good news, the bad news is that Congress and federal agencies are curious about non-traditional lending.
Bob Coleman: You took the next question right out of my notes. Set this up for us. Why is Congress curious about this? What’s happening on the hill that the industry should know about? What future pressures are going to occur?
Tom Sullivan: Well, there’s a small business lending gap or there’s a small business cash gap that exists and some would argue that that gap has gotten bigger after Dodd-Frank. You have community banks that, unfortunately, are not able to make loans at a profit for under $150,000 or $100,000, but small businesses still need that capital. They need that capital from $10,000 up to $250,000 and anywhere in between and so Congress wants small business to be successful. They know that that success sometimes hinges on access to capital and so how to fill in that gap is a question that policymakers have.
The non-traditional small business lenders, the thin tech folks who were using innovation to get money to small business quicker and in a way that is less expensive they’re uniquely positioned to fill that gap. So Congress wants to know about them, they want to help them and so do federal agencies, but the curiosity and sometimes the misinformation on how they are basing their assumptions really has to be satisfied and that’s what this coalition is all about. The coalition is getting in front of Congress, getting in front of the alphabet of federal regulators and explaining the value of innovation in t...