In Ohio, 20 percent of businesses are small, and they employ 48 percent of the state’s workforce, according to the Ohio Development Services Agency.
The importance of small business isn’t lost on First Federal Lakewood, which has 18 branches throughout Northeast Ohio. In 2016, the bank loaned more than $50 million to local projects, including those by small firms.
This year, First Federal Lakewood plans to unveil new software that will expedite loan applications for small businesses. Instead of requiring a visit to a local branch, the bank will send loan officers and tablets directly to business owners, who can apply on the spot for loans of less than $100,000.
The software will decrease the wait for loan approval from days to hours. In some cases, the bank will approve loans before the loan officer leaves the business.
“It’s pretty exciting,” says Jeff Bechtel, First Federal Lakewood’s chief lending officer and senior vice president. “It’s cutting edge because I don’t know if anyone else is providing it here.”
Bechtel says First Federal Lakewood developed the software with a large East Coast bank that has its own innovation arm.
“Quick turnaround on loans is always high in demand,” Bechtel says.
In addition to the small-business market, First Federal Lakewood — established more than 80 years ago in Lakewood — values the individual. Bechtel says the bank is a leading provider of home mortgage loans in northern Ohio.
Bechtel says working with small banks like First Federal Lakewood comes with several advantages. For starters, First Federal is a mutual, meaning that depositors, not shareholders, own the bank.
“That allows us to take a long view with customers,” Bechtel says. “We don’t sell them products every quarter that they don’t need just to bump up our profits to satisfy shareholders.”
Also, First Federal customers have access to senior leaders who can make decisions quickly.
“I’ve worked at large companies,” Bechtel says. “From experience, small banks are more consistent in the market, more predictable. They stick to their core competencies. We’re not in and out of certain businesses — we’re more stable, without as much turnover.”
Bechtel says First Federal invests its deposits locally.
“It’s the ‘shop small/buy local’ approach, which is current nowadays,” Bechtel says. “We believe in it and it seems to be working for us.”