Paring down the bureaucracy: There are fewer bosses and more tangible benefits now for CDC Small Business Finance Corp.'s Kurt Chillcott

San Diego Business Journal, Jan 21, 2002 by Mike Allen

Moving from a high-profile government job to a smaller nonprofit has been a good thing for Kurt Chillcott.

For openers, he has fewer bosses as the president and CEO for the CDC Small Business Finance Corp., a San Diego-based nonprofit that provides government-guaranteed small business loans.

In his former job as director of community and economic development for the city of San Diego, Chillcott had to answer to the city manager, as well as the nine elected members of the City Council.

At times, operating in a multiple-authority bureaucracy laden with politics was stressful, he says.

"Here, I'm in control of our destiny, and it's not influenced as much by the political side or the bureaucracy," he says. "There's probably not as much frustration in terms of being able to get things done."

Chillcott, 47, was at the city for nine years, and previously worked for the state in its Trade and Commerce Department for five years.

While he carved out a successful career in government, he says he's much happier where he is today.

These days, when he drives by a business that received an SBA loan, he gets the feeling he's really making a difference.

"When you see the physical evidence of your work, even though you're not the direct contractor, you know that you helped for that to happen in some small way. That's what keeps me excited about working here."

The CDC Small Business Finance Corp. is a nonprofit entity that makes loans guaranteed by the federal Small Business Administration, primarily for the purchase of a company's real estate.

Continuing The Mission

Originally founded in 1978 as a part of the San Diego Urban League, the CDC (which stands for Certified Development Corp.) was created as an independent nonprofit in 1981 by its first president, the late Art Goodman.

The CDC's mission then was the same as it is today: to provide government-guaranteed SBA loans to small businesses that usually wouldn't qualify for credit from most commercial lenders.

Goodman was fighting a losing battle with cancer during 1998 and looking for a replacement. Chillcott, a member of the CDC's board since 1989, was ready for a change.

"I wanted the challenge of, in essence, running my own company.

It was quite a change. At the city's economic development department, he oversaw more than 250 employees.

Currently, he manages 44 people in five offices, including San Diego, Riverside and Orange counties, a number that allows him to get to know everyone. The CDC may not register much name recognition among the general public, but within its niche market of nonprofit business lending, it certainly does.

Last year, the CDC was a participant in 330 business loans with a total project value of some $420 million. Nearly all of those loans were through the SBA's 504 loan program, aimed at helping businesses purchase the buildings' they operate from, or for equipment.

Generally, the loans are package deals with commercial banks providing half the total, and CDC advancing 40 percent. The borrower is expected to put 10 percent down on the property.

Made at below-market interest rates to qualified borrowers, the loans have proved quite popular in San Diego. For the past several years, the local CDC has been the largest lender in transactions and dollar amount among the 260 CDCs in the nation.

Goodman approved the, selection of Chillcott to succeed him, and it made sense in light of Chillcott's career with the city, says Abi Barrow, the CDC's chairman and manager of UCSD's Von Liebig Center in the School of Engineering.

"Having been on the board for a long time, Kurt knew the operational side of the organization, but he also fully embraced Art's vision, and that's economic development of the community."

As the point person for a key small-business lender, Chillcott serves on the board of several community organizations.

Asked how many, he says honestly he doesn't know, but it's somewhere between eight to 10.

Among them are two national groups, the International Economic Development Council, which he co-chairs, and the National Association of Development Companies.

Community-Minded

He also serves on the local boards of the Southeastern Economic Development Corp., the mayor's Small Business Advisory Board, Casa Familiar, the San Diego Regional Technology Alliance, and Citizens for Coordinate Century 3.

Along with his regular duties as CEO, Chillcott's board responsibilities push his average work week to about 60 hours. His wife would probably say it's more, he adds.

It's "just part of the job" for the low-key Chillcott.

"What has always been important about my work is that it's not about creating profit for shareholders, but that it is about benefiting the general public in some way."

Chillcott, the oldest of three children, says he inherited his social attitude toward work from his parents, both of whom were teachers. His dad was an anthropologist and his mother taught junior high school.

A better-than-average student, Chillcott applied to and was accepted at Harvard University, but that may have had more to do with the school's goal of geographic diversity and the fact that his father is an alumnus, he says.