O Bee's V.P. of Business Lending, Tim Timmer, recently sat down with Kaitlyn Armstrong of South Sound Business for a little Q&A. Learn about Tim's deep commitment to the community and how our Business Services team can help your businesses grow.
O Bee Credit Union’s current commercial banking program wasn’t its first attempt at getting into commercial lending. What challenges did they face when they tried initially?
I think it was political. Credit unions in Washington state were just dipping their toes in commercial banking, and there was a pretty strong rebuke from the local banking lobbyists at the time. I think at that point, O Bee just wasn’t in the position to take on that big of an ordeal, so they backed out. Since that time, there’s been a lot of credit unions that have gotten into commercial banking, and it just seemed like the timing was right to try again.
Tell me about some of the challenges your team faced in building O Bee’s commercial lending division.
Certainly, there’s a lot of challenges when you’re starting a program from the ground up and that’s what we were doing. When you have something like that, you have to have individuals who come over with that base knowledge of credit underwriting for commercial loans and lines of credit. You can’t be somebody new or somebody who doesn’t have any experience, because the catch-up time is pretty significant, and we had to hit the ground running. So, having individuals who came in with collectively over 40 years of experience – that was really important to make sure this was successful.
Small businesses have been hit so hard by the pandemic. How has that impacted your department and your lending practices?
You really have to be good stewards of the programs that are available. For us, the Paycheck Protection Program put on by the SBA was something we reviewed, but unfortunately, with just three of us and hot having SBA abilities at the time, we were unable to jump on that like we wanted to. So, we had to find some sort of solution for not only our members, but also individuals who were calling and not getting any other solutions anywhere else. We knew we had to come up with something, so we reached out to a group called Lendio, and Lendio was able to put a link on our website and do SBA PPP submittals through that website.
It was a solution. It wasn’t our favorite — we certainly like to have those tangibly — but it did teach us something. We want to be prepared going forward. So we have applied and have been approved for our SBA ability to do 7(a) processing. If these types of programs come up in the future, we’ll be better prepared for it.
That’s one, and two: We have to take a look at each business application. Not just with the way things are right now, but we also have to look back at that business’ history, and we have to be somewhat optimistic about what’s going to happen in the future. We can’t simply make that decision based solely off (2020). That’s unfair. And we don’t believe it’s going to last. Things have to get better at some point.
In addition to your role at O Bee Credit Union, you’re the co-owner of Fresh Start Housing, which provides clean and sober housing for homeless community members throughout the area. What motivated you to pursue that?
I know what homelessness feels like. It was brief in my life, and it was when I was a young man. I had friends and individuals who allowed me to couch-surf or gave me temporary shelter, and that was far better than others I’ve met and talked to. So, I had a leg up, but I was homeless. What people need to understand is, it is very hard to pull up your bootstraps when you don’t have boots, and you’re barefoot. It’s very hard to go for a job interview when you don’t have hot running water and someplace to shower, and now you’re expected to go put your best foot forward when you don’t have a place to put your clothes.
Fresh Start isn’t just about providing homes for the unhoused, there’s a drug and alcohol component, too. Can you speak about that?
My family definitely had issues with that, and I know how difficult that is, as well. It’s a battle that’s not a clear and definitive win. You don’t just have one day sober and (say), “Great, you’re done; you’re on with the rest of your life.” It’s a consistent, constant battle, and I wanted to find solutions for both. At the same time, I wanted to combine it with my know-how of the commercial world. I needed to make sure that I could do this in a fashion that I understood. And what I understand is, it was doing this as a for-profit type business.
What’s in store for your department in 2021?
We can go forward with some of the unsecured lines of credit with SBA support. We can help individuals who are looking to purchase a business that they’ve been working at for years and just don’t have the capital to come in and put the down payment that most banks would require. Now we can offer that. We can offer it to some folks who maybe COVID-19 has thrown for a loop, but they still see some opportunities to grow their business. Unfortunately, 2020 (was) unkind because of COVID. We can put that under the SBA 7(a) microscope and still get some sort of solution and satisfaction.
The terms are all very favorable — the first three months of payments are provided by SBA; SBA-guaranteed fees are waived for the client; and the SBA loan guarantee has been raised from 75 to 90 percent until Sept. 30, which allows financial institutions to offer higher-risk lending than they usually would. So, I’m bullish; I’m very excited about what’s to come. And I think everyone is so hungry to go out and start going to restaurants again. I think people are going to just go bonkers, and I think you’re going to see the economy, at least the local economy, is going to reflect that. And we want to be prepared. So, I can’t wait for that.
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