Q&A: Jeff Butland taking SBA to the banks

Vermont Business Magazine, Jun 01, 2002

Jeffrey H Butland was sworn-in as the New England Regional Administrator of the US Small Business Administration on January 7, 2002. In this capacity he manages SBA District Offices in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont and has oversight of the SBA's Financing, Marketing and Outreach efforts in the six-state region. He works out of Boston.

Mr Butland earned a Bachelor's Degree in Political Science from Bates College in Lewiston, ME, in 1973. Between his junior and senior years at Bates he served on active duty in the US Marine Corps for four years. He retired from military service in 1994 with the rank of major after serving for 21 years on active and reserve duty.

Prior to assuming his current position with the SBA, Mr Butland was an Operational Analyst for LL Bean in Freeport. His responsibilities included planning and special projects in support of Bean's order fulfillment process.

Mr Butland served in the Maine Legislature from 1988 to 1998. He was a member of the House of Representatives from 1988-1992 and a State Senator from 1992-1998. He served as President of the Maine Senate during 1995-1996. As Senate President, Mr Butland devoted his efforts to improving the Maine economy through small business development. He assumed a strong leadership role in the critical areas of tax relief, regulatory reform and the widening of the Maine Turnpike.

Mr Butland lives in Cumberland, ME, with his wife Nancy and their four children. Timothy McQuisten and John Boutin interviewed Mr Butland, along with Ken Silvia, the head of the Vermont SBA on March 15.

VBM: Let's start with what you see as the general plan for boosting SBA lending? It's been in a sort of slow decline for several years here.

Butland: We actually had a banner year last year. What we've been doing is getting around and meeting with the partners and making ourselves as visible as we can. There's a great team in the SBA office in Vermont, and I have all the faith in the world in them. But once in a while bringing someone like me in allows them to go back and reinforce the message to the departments they work with on a regular basis.

What I'd like to see is what we have in many of the other states in New England - a real aggressive competition between two large banks for loans. We have this in Massachusetts, Connecticut and Rhode Island. You're not going to get quite that dynamic up here, but if you could get Chittenden and Banknorth and someone else to compete, it's good business. It's good business for them and it's always good business for small business folks. Getting everyone engaged and getting that network going is important.

There are some things we can try to do, getting the loan rates down, and that's something that people have been concerned about - the cost of bonds and loan guarantees from the FTA. Then there is always the issue of paperwork. Sometimes people are a little stand-offish, and it can be a little more complicated than the average, typical loan.

The SBA works well in either an up economy or a down economy. We're either providing loan guarantees for growth and expansion or we're providing loan guarantees for working capital to tide a business over until the good times.

One dynamic is the competition among the smaller banks, where it might be an advantage not to go to the SBA. Until we get our arms around those issues that are preventing them from coming to the SBA, we aren't going to be able to have an impact on that kind of competition.

VBM: How do you convince the banks, how do you talk to them. to encourage them to provide these loans?

Butland: Well, we do a lot of listening. We hear what their concerns are and let them know that we'll be working on their behalf with the people down in Washington where most of the regulations are changed. We remind them of what we have to offer, the loan guarantees and the technical assistance that we're able to provide. We think that it's good business for a bank to do the SBA loans, to help the small business grow, and then to benefit from all the other banking relationships that a small business will bring along with them.

I don't think it's a tough sell. We've got good products, we've got good people, and it's good business to have us involved and to bring those small businesses into their banks.

VBM: How have the interest rates being so low played into what you folks are trying to do?

Silvia: When the interest rates dropped as rapidly as they did, obviously the bankers are concerned. Those are the interest rates they base everything on, and when what they can charge on loans drops so dramatically, it has a huge impact. So now, if I've got a commit on this side at a lower rate, and I've already committed on the other side at a higher rate, and the difference is my profitability, and that has gotten real, real thin. I think in many respects it has affected the lending, because it helps to push the product.

VBM: Why does Vermont seem to be going in the opposite direction of the rest of the New England states?