NEW YORK (CNNMoney.com) -- Bank of America will hire 1,000 new small business bankers by early 2012, the company announced Thursday.
The Charlotte-based financial giant says that this is just one step toward a commitment to increasing its support for small businesses.
The first wave of additional bankers will be added in Dallas, Los Angeles, Baltimore and Washington, D.C. They will focus on companies with less than $3 million in annual revenue and will work closely with local business owners, spending time at their place of business and learning about the companies, according to CEO Brian Moynihan.
"Our small business bankers will live and work in the communities they serve, making them uniquely qualified to work with these businesses and provide the best combination of financial services to help them grow," Moynihan said during keynote remarks at a Chief Executive Club of Boston luncheon.
The new legion of bankers will advise Main Street businesses on issues ranging from cash management to payroll to retirement funding. "Credit will be part of the solution set that we have for our small business owners," said Kerrie Campbell, who leads Bank of America's small business lending unit. "It is very relationship focused."
That's new territory for a national bank: It's the smaller community banks that usually stand out for their relationship building. As a result, most small business banking happens with community banks.
The nation's largest banks have a lot of ground to make up: Credit lines and loans to small companies were slashed during the Great Recession. Federal Reserve chairman Ben Bernanke recently estimated that $40 billion worth of loans to small businesses disappeared.
Bank of America played its part in the decline. Like many banks, it makes loans through the Small Business Administration's government-banked lending programs. Those loans represent a very small portion of overall small business lending, but they are an easily tracked indicator of a bank's lending activity -- and Bank of America (BAC, Fortune 500) has pulled back sharply.
In 2008, Bank of America made 3,296 loans totaling $102.3 million through the SBA's flagship 7(a) loan program. Many went bad: Ken Lewis, then the company's CEO, infamously called the bank's small business loan portfolio a "damn disaster." In 2009, at the height of the credit crisis, the financial giant made just 308 SBA loans, totaling $17.6 million.
Its lending barely picked up in 2010. In the SBA fiscal year that ended Sept. 30, Bank of America made 185 7(a) loans, totaling $22.8 million.
Bank of America said that its steep drop-off stemmed from a shortage in both demand and in qualified borrowers.
"Among those seeking loans, the creditworthiness of many businesses has changed," bank spokesman Jefferson George said. "Cash flow -- the most important factor -- often is down. The value of collateral, such as real estate or equipment, has decreased."
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.85%||3.79%|
|15 yr fixed||3.16%||3.14%|
|30 yr refi||3.82%||3.78%|
|15 yr refi||3.15%||3.13%|
Today's featured rates:
More than 5% of DACA recipients have started their own businesses since enrolling the program, according to a recent survey. More
Residents of Beattyville, Kentucky, voted overwhelmingly for Donald Trump a year ago because he promised them jobs and renewed prosperity. One year later, not much has changed. But few people here are blaming him for that. More
The FCC will vote on whether to repeal net neutrality comes amid mounting protests from tech companies, consumer advocacy groups and even some Republicans in Congress. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Rental affordability has improved, but for many renters it's still a struggle to make ends meet. More