This week on The Art of SBA Lending, we sit down with Live Oak Bank CEO and founder, Chip Mahan, to discuss the revolutionary ideas that transformed the SBA landscape. Chip Mahan, who started the bank in 2008, disrupted the existing SBA playbook by focusing on nationwide industry vertical lending.

Chip details the bank's founding during the 2008 financial crisis , when he was told by the FDIC to liquidate the bank. He reveals the unique philosophy that led to the bank becoming a top SBA lender, including: rejecting the traditional commission-based compensation model to properly align interests , developing a "theory of verticality" by targeting specialized industries like veterinarians and chicken farmers , and using data from the Freedom of Information Act to determine which industries pay back their loans. He argues that a floating rate 7(a) loan is the "best asset that anybody can put on any bank's books."

The episode also covers the bank's commitment to technology, the importance of perfecting the "handoff" between the lender, underwriter, closer, and servicer , and the future of banking in the age of Artificial Intelligence. Chip explains how AI will dramatically affect determining SBA loan eligibility and create an "automatic credit memo".

🎯 In this episode:

• Founding Under Fire: The story of getting a bank charter in May 2008 and being told to liquidate the bank in March 2009 by the head of the FDIC in Atlanta.

• The Verticality Edge: Why Live Oak focused on niche industries and hired domain experts to create an "unbeatable" credit box.

• No Commissions: Why a compensation model based on stock and growth is superior to commissions, citing Charlie Munger's famous quote on incentive plans.

• The Future of SBA: Chip's prediction on the future of the 7(a) program and why he believes the loan size limit should be increased to $10 or $20 million.

• AI & Banking: How artificial intelligence will automate the credit memo, cash flow analysis, and dramatically simplify SBA eligibility determination.

💬 Do you agree that the floating rate 7(a) loan is the best asset for any bank's books? Let us know in the comments!

🎙This episode is sponsored by:

Lumos

Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance.

If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/

Shatterbox

Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba and set up a discovery call today.

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

This week on The Art of SBA Lending, we go behind the scenes with Heidi Whitesell to unpack the leadership, culture, challenges, and ultimate wind-down of a successful SBA lending division. Ray Drew sits down with Heidi, who he calls one of the best leaders he's ever worked for, to discuss the philosophy that created a legendary, family-like culture in a fully virtual, non-bank setting.

Heidi shares the vision for her former venture, Fund-Ex, which quickly climbed the national rankings without losing its unique team culture. She reveals her leadership principles, including the powerful belief that "love always works," and explains how relentless positivity, transparency, and providing resources ahead of revenue were the keys to their success—even in a highly complex industry. The conversation takes a raw and emotional turn as Heidi opens up about navigating the intense, uncertain process of a company sale and eventual wind-down while privately battling a serious health crisis, revealing why she chose to stay and fight for her team.

🎯 In this episode:

• The Vision for Culture: How a fully virtual SBA team built a top-25 lending operation with a "family" culture using the principles of People, Process, and Product.

• Leadership Secrets: The power of transparency, collaboration, and why staying positive and putting the team first are non-negotiable for a leader.

• The Resource Strategy: Why investing in resources before revenue is essential for speed and service, and how this investment combats costly employee turnover.

• The Ultimate Test: Heidi's emotional account of leading the company through the stress of a sudden sale, a liquidity crisis, and the difficult process of a year-long wind-down.

• A Leader's Sacrifice: The incredible story of how a commitment to her team kept her fighting while undergoing chemotherapy.

💬 What do you think is the hardest part about building a strong culture in a virtual environment? Share your thoughts below!

🎙This episode is sponsored by:

CORPSMART

Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to [email protected] to learn more about their services.

Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers.

Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShow https://www.youtube.com/@SBAToday

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

This week on The Art of SBA Lending, we explore the world of USDA Business & Industry (B&I) lending, often considered the "last frontier" of government-guaranteed small business finance. Host Ray Drew, who admits to knowing very little about the program, is joined by a panel of USDA experts—Steve Small, Jason Hoerr, and Charles Conoley—to demystify this often misunderstood loan program.

The panel provides a deep dive into the B&I program, which is designed to stimulate economic activity and job creation in rural areas (populations of 50,000 or less). They reveal key advantages over the SBA 7(a), including larger loan amounts (up to $25 million), 30-year terms on real estate, and eligibility for investment real estate and non-profits.

We tackle the common misconception that USDA loans take forever, clarifying that acquisitions can be approved in 2-4 weeks after bank approval. The panel explains why the USDA culture is fundamentally different from the SBA, acting more as a participant in a conventional loan rather than a strict insurer. Finally, we dive into the controversial question: Should the USDA B&I program be absorbed by the SBA?

🎯 In this episode:

• An overview of the USDA B&I program and its mission to create jobs in rural communities.

• Why the USDA guarantee of 80% up to $25 million is a "magic bullet" for rural commercial finance.

• The big cultural difference between USDA and SBA, and why USDA almost never repairs a guarantee.

• The value of a loan packager in navigating the "never-ending" nuances of state-by-state USDA processes.

• The biggest pain points: from outdated environmental regulations to staffing upheaval and inconsistent policy.

💬 Should the USDA B&I program be absorbed by the SBA? Let us know your thoughts in the comments!

🎙This episode is sponsored by:

Lumos

Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance.

If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/

Shatterbox

Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba and set up a discovery call today.

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending. Also, make sure to follow along with our sister shows, The BDO Show and SBA Today.

This week on The Art of SBA Lending, we're doing something special: a Money Store reunion episode. The Money Store pioneered the Business Development Officer (BDO) model and revolutionized the SBA lending industry, holding the top position for 16 consecutive years. Host Ray Drew brings together four Money Store alumni-John Handmaker, Vince Calicchia, Joe Weiner, and Sam Renta-to share stories and insights from the company that changed SBA lending forever.

The panel reminisces about the legendary BDO boot camps, the company's aggressive marketing, and its commitment to a sales-driven culture. They discuss what made The Money Store so successful and how that culture has influenced a generation of SBA lenders. From Mark Turtletaub's visionary leadership and theatrical flair to the infamous "Purple Palace," the alumni provide a rare glimpse into the "good old days" of SBA lending. The episode also features a surprise appearance from Mark Rattfield, a former underwriter who became a successful BDO after being inspired by a colleague's W-2 form.

🎯 In this episode:

• The origins of The Money Store and how they became the number one SBA lender in the country.

• The "sensationalized" marketing that made them famous, including co-branded signs and the BDO boot camp.

• The "cookie story," a lesson in focusing on a company's specific credit box.

• How a sales-driven culture and a shared vision created a sense of purpose and synergy among the team.

• The big difference between SBA lending then and now, from paper packages to referral fee culture.

💬 What's your take on the referral fee debate? Did The Money Store-era BDOs have it better, or are today's lenders more equipped for success? Join the debate in the comments.

🎙This episode is sponsored by:

CORPSMART

Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to [email protected] to learn more about their services.

Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers.

Link to "A day in the life" video: https://youtu.be/qZO7ihtehkU?si=sc-DvfagqqyBlBb8

Link to "Mad to make loans" music video: https://youtu.be/gwRa3MKXe6g?si=w5eCh_WPdLVj_YNf

Join Ray and some of the Money Store alum LIVE on LinkedIn September 26th at 3pm ET for a trip down memory lane:

Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShow https://www.youtube.com/@SBAToday

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

This week on The Art of SBA Lending, we're getting a unique look at the state of the SBA marketplace from the perspective of the loan broker. Host Ray Drew brings together a panel of top-producing SBA loan brokers whose combined volume would rank them among the top 1 or 2% of all SBA shops. Joining the conversation are Matthias Smith from Pioneer Capital Advisory, Jerry Freedman from Freedom Business Financing, and Zach Renta from SBA Loan HQ.

The panel discusses why the traditional BDO model is becoming outdated as brokers build sophisticated operations and gain direct access to information and lenders. They reveal which lenders are winning and losing in today's competitive landscape, and why the old way of doing business — relying on personal relationships over product competitiveness — is no longer enough to succeed. The conversation gets candid as the brokers air their biggest pet peeves about working with lenders, from slow response times to a lack of respect for the work they put into a deal.

🎯 In this episode:

• The rise of the loan broker and why they are becoming more important than the BDO in controlling deal flow.
• The three categories of lenders and why a more conservative bank might still be the right choice.
• Why time kills deals, and how a broker's job is to ensure certainty of close.
• The pros and cons of lenders using Loan Service Providers (LSPs) and why it can lead to a "disastrous" experience for the borrower.

💬 What do you think is the biggest challenge when working with a BDO or a broker? Drop a comment below and join the debate.

🎙This episode is sponsored by:

Lumos

Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance.

If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/

Shatterbox

Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba and set up a discovery call today.

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending. Also, make sure to follow along with our sister shows, The BDO Show and SBA Today.

This week on The Art of SBA Lending, we sit down with Everett Sands, a leader who successfully propelled Lendistry into the top tier of the nation's SBA 7(a) lenders. Everett explains his approach to SBA lending, which involves applying lessons learned from other industries like residential and auto lending to an industry he feels is decades behind.

As a fintech and a CDFI, Lendistry occupies a unique space in the market. Everett discusses how his company is leveraging technology and a mission-driven approach to win customers by offering a better, more user-friendly experience than predatory online lenders. He challenges the traditional, anecdote-driven banking model and argues that by embracing data, AI, and streamlined processes, the industry can better serve the small business community and protect its "home turf" from bad actors.

🎯 In this episode:

➡️ Why Everett views the financial industry's resistance to technology as "losing at home".

➡️ The surprising decline of banks in the U.S. and how it's created a gap in lending to small businesses.

➡️ How a company can handle 344,000 applications in just 15 days.

➡️ Why the mission to help small businesses is the key to embracing change and innovation.

➡️ A creative solution to the MCA refinance problem that protects both lenders and borrowers.

💬 Is it possible for traditional SBA lenders and fintechs to meet in the middle to better serve small businesses? Join the conversation in the comments below.

The BDO Retreat is back for its fifth and final year, and this time, we're taking you to Key Largo, Florida, on January 16th and 17th.

Join us for a weekend of BDO workshops, exclusive networking, and, as always, a few surprises: https://www.artofsba.com/bdo-retreat

🎙This episode is sponsored by:

CORPSMART

Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to [email protected] to learn more about their services.

Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers.

Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShow https://www.youtube.com/@SBAToday

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

This week on The Art of SBA Lending, we're joined by Lukas Haffer, co-founder of Casca, to discuss how AI is set to revolutionize small business lending. With a unique background that includes building software for major European banks and earning Standform MBA, Lukas brings a fresh, outside-the-box perspective to our industry. He shares how his company is taking on the "disaster" of small business financing by arming SBA lenders with cutting-edge technology to fight back against predatory online lenders.

We dive deep into how new technology can solve the industry's biggest pain points, from a closing process that takes months, to underwriters bogged down with manual data entry. Lukas reveals how his team's mission-driven approach and dedication to understanding the day-to-day work of lenders led them to build a solution that automates the tedious tasks and lets professionals focus on what they do best: building relationships and solving complex financial puzzles.

🎯 In this episode:

• How a software CEO "walked a mile in a lender's shoes" to understand the industry's problems firsthand.
• The key to building a seamless borrower experience and why 63% of applications start on nights and weekends.
• Why a simple online form is a game-changer for reducing human error and saving weeks of back-and-forth.
• The future of SBA roles and why the traditional "assembly line" model is due for an upgrade.
• Why the mission to empower entrepreneurs is what truly drives innovation in this space.

💬 If you could automate one task in your lending process, what would it be? Drop a comment below!

If you're interested in learning more about Casca, email Lukas Haffer at [email protected]

The BDO Retreat is back for its fifth and final year, and this time, we're taking you to Key Largo, Florida, on January 16th and 17th.

Join us for a weekend of BDO workshops, exclusive networking, and, as always, a few surprises: https://www.artofsba.com/bdo-retreat

🎙This episode is sponsored by:

Lumos

Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance.

If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/

Shatterbox

Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba and set up a discovery call today.

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending. Also, make sure to follow along with our sister shows, The BDO Show and SBA Today.

This week on The Art of SBA Lending, we're joined by Heather Endersen, a true veteran of the SBA world with a career spanning decades. Having managed SBA departments and pioneered business acquisition lending, Heather shares her journey and explains why she made the leap from a top-producing BDO at a bank to launching her own brokerage.

Heather gets candid about the shift in the SBA landscape, from the rise of business acquisition loans to the changing dynamics between lenders and borrowers. She also pulls back the curtain on the brokerage model, explaining why it's a more efficient way to get deals done and how it's poised to be the next big thing for lenders who have built a strong personal brand. We also dive into the current challenges facing the industry, including the controversial new policies on preferred equity and seller guarantees.

🎯 In this episode:

➡️ The surprising data on business acquisition loan default rates.

➡️ Why a low rate on a real estate loan can be a "hamster wheel" for lenders.

➡️ The key difference between a BDO who is a "vendor" and one who is a "value add".

➡️ Why borrowers are now challenging lenders on their interpretation of the SOP.

➡️ The biggest policy change Heather would make to the SBA today.

💬 What's your take? Should a seller be required to personally guarantee a loan on a partial change of ownership? Join the debate in the comments!

The BDO Retreat is back for its fifth and final year, and this time, we're taking you to Key Largo, Florida, on January 16th and 17th.

Join us for a weekend of BDO workshops, exclusive networking, and, as always, a few surprises: https://www.artofsba.com/bdo-retreat

🎙This episode is sponsored by:

CORPSMART

Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to [email protected] to learn more about their services.

Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers.

Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShow https://www.youtube.com/@SBAToday

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

This week on The Art of SBA Lending, I'm sitting down with Diane Heyden to get her take on leadership, career shifts, and the evolving landscape of small business lending. Diane, a seasoned veteran who has worked as a BDO, sales manager, and division manager, shares her unique perspective on what it takes to succeed in an industry where no two people are alike.

From a memorable but short-lived move to a bank in Iowa to taking on a new role with a beloved team on the West Coast, Diane unpacks the lessons learned from her own career journey. We also dive into the state of the industry, debating the impact of Fintechs, the "do what you do" era, and the crucial role of "heart" in a numbers-driven world.

🎯 In this episode:

➡️ The real value of a bank's core deposits and what it's doing to lending strategies

➡️ Why BDOs are like "snowflakes," and the right way to manage them

➡️ Looking back at the aftermath of "do what you do" SBA policy

➡️ Why a marriage of old-school lending values and new technology is the key to the future

➡️ A heartwarming story of a rock climbing gym owner who is the "poster child for SBA"

💬 What's the biggest challenge you've faced in your SBA career? Share your story in the comments.

🎙This episode is sponsored by:

Lumos

Lumos empowers your small business lending growth with cutting-edge analytics and streamlined applications that optimize your performance.

If you're ready to take your small business lending to the next level with cutting edge analytics visit https://lumosdata.com/

Shatterbox

Learn how Shatterbox can help you hire and invest in bright young talent without breaking the bank. Go to https://shatterbox.io/artofsba and set up a discovery call today.

Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week!

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.

This week on The Art of SBA Lending, Ray Drew sits down with David Tinsley of Lenders Cooperative to unravel the shifting landscape of SBA lending and the role of technology and LSPs in shaping its future. Recorded live from the MALC conference, they dive into the buzz surrounding the unannounced new SOP and what it means for lenders.

From the challenges of scaling an SBA division to the surprising dominance of AI in industry conversations, Ray and David explore how to navigate growth, manage risk, and foster innovation — "throwing the whole playbook out". They also tackle the ongoing debate of in-house operations versus leveraging Lender Service Providers (LSPs).

🎯 In this episode:

➡️ The "come what may" attitude of SBA lenders embracing change

➡️ How LSPs offer a lifeline for smaller banks to compete and scale

➡️ The critical role of AI and automation in streamlining SBA processes

➡️ Dispelling myths about SBA lending: "It's not as scary as they have worked it up to be"

➡️ The future of small business and SBA's opportunity to become a household name

💬 Are you ready to adapt to the new era of SBA lending, or are you holding onto the old ways? Join the conversation!

🎙This episode is sponsored by:

CORPSMART

Want to win over your closing team? Next time you pick up a deal involving titled assets, go to corp-smart.com/artofsba and request a quote for tax, tag, and title so you can structure your loan correctly right from the jump. When it comes to titling vehicles, boats, and aircrafts, CORPSMART has the knowledge to assist you confidently. CORPSMART offers full-service titling solutions, working directly with the local agencies to get your titles processed accurately and on-time. If you've struggled with recording titles, reach out to [email protected] to learn more about their services.

Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call, go to https://rapidbusinessplans.com/art-of-sba. Find out why so many top-producing BDOs recommend Rapid to their small business borrowers.

Loving The Art of SBA Lending episodes? Make sure to follow along with our sister shows, The BDO Show and SBA Today, each week with the links below! https://www.youtube.com/@TheBDOShow

https://www.youtube.com/@SBAToday

Head to http://www.artofsba.com for more information and to sign up for our must-read monthly newsletter to stay up to date with The Art of SBA Lending.