Lending to small businesses can be difficult. Every business is different, the challenges they face are complex, and it can take time to understand the business case. Is it then surprising that financial institutions have traditionally underserved small and medium-sized enterprises (SMEs)?
At the Canadian SME Banking Forum last month, RFi Group’s Sarah Hollinshead caught up with Lesley Lawrence, a senior banking executive who has dedicated most of her career to supporting SMEs. Lawrence, Senior Vice President for Ontario with the Business Development Bank of Canada (BDC), has 30 years of banking experience, 18 of which have been spent with BDC.
She shared her views on upcoming changes to the industry, which customers need what types of services, and ultimately how to drive innovation in this space.
A forward-thinking executive As someone who has spent the majority of her career working with entrepreneurs, her perspective on the future is bright, and she remains focused on what is next for the industry.
“I think there is much better access to capital for entrepreneurs today than there was before. The challenge now for entrepreneurs is navigating that landscape and knowing who to go to, for what, and when.”
Marrying her professional experience with a passion for aiding SMEs, Lawrence brings incredible expertise to the industry. In particular, Lawrence is the driving force behind BDC’s initiatives to better support women entrepreneurs. “In 2015, we were asked by our shareholder, the federal government, to hit a $700 million target to lend to majority-owned female businesses in three years. I was appointed as the national champion for this strategy and went to market by engaging with prospective partners across Canada: government, associations, private organisations, etc. We focused on visibility and bringing awareness to women entrepreneurs.”
By the end of January, after 30 months, BDC had authorized over $912 million in loans to majority-women owned businesses across Canada.
BDC also made a push to bring greater internal awareness about the subtle differences that distinguish women entrepreneurs, what they value differently and how to help them scale up their companies.
“We as an organisation recognise this is one of the fastest growing market segments in Canada. We wanted to be a market leader in helping them grow their businesses.”
Entrepreneurs need more than money to succeed.
BDC’s exclusive focus on entrepreneurs and the combination of both advisory and lending is unique in the Canadian market and applies to all their customers.
“Our experience has shown that entrepreneurs need access to two things to grow their business: They need money, but also advice to handle adversity and overcome their challenges.”
Entrepreneurs are often priced out of quality advisory services. Lawrence highlights that by providing expert advice alongside loans, business owners are empowered to build stronger, growing businesses, to the overall benefit of the bank.
“We judge every project on its on merit, and sometimes that means the advisory side of the business is needed to help guide and grow companies."
We do that because it means the company is more likely to have a longer life and their ability to succeed is significantly higher. That is the kind of customer that we want and benefit from. Ensuring entrepreneurs have access to the services they need Although BDC does not offer a broad range of banking services, they work with other actors in the ecosystem to complement what is already offered in the market.
“We will introduce entrepreneurs to our partners, which again is a value-added service for our customers. We recognise that we are just one piece of the puzzle for entrepreneurs and that they need to have other financial intermediaries there to support them.”
Lawrence talks about establishing the right service model for each business owner, with some businesses wanting a close personal relationship, some wanting a purely digital approach, and others sitting somewhere in between.
“We used to have a ‘one size fits all’ approach to our relationship with clients, not recognising that every client want to interact with us differently. We are now in the process of determining how every client wishes to interact. We are leveraging technology to work with clients and we have created online channels so that clients feel they can come to us and have a relationship online.”
Driven by relationships
The relationship with business owners is central to what drives Lawrence in her day-to-day.
“I always say, if you are ever having a bad day, get into your car and go visit a client, they will always inspire you with their business success, and what they go through to achieve it. That is one of my favourite things about my job”.
The passion that emanates from Lawrence is clear, and perhaps integral to her successes in a dynamic and evolving sector.
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