Noah Bank, a small ($228 million in assets), regional (four branches in Pennsylvania,New York, and New Jersey), specialty (caters to Korean-American entrepreneurs) lender may seem small compared to its Manhattan neighbors. Yet in 2011, its first year of operations, Noah topped every other bank in the SBA’s New York district in SBA-guaranteed 7(a) loans, lending more than $88 million to 68 entrepreneurs, according to data from the agency.
In fact, at least five of the SBA’s top 25 lenders nationally are banks with deep roots in immigrant communities, especially since larger banks have backed off small business loans since 2008. These smaller lenders are forced to look beyond the financials and build personal relationships with the entrepreneurs to make loan decisions that would look questionable on paper.
But, lending to this niche isn’t as easy as just saying yes to someone turned down by the big boys. Lenders catering to immigrant entrepreneurs may struggle to reach clients who are distrustful of or unfamiliar with US financial institutions. That cultural difference puts the onus on banks to do extensive customer education not often seen at mainstream banks.