More than 300 CDFI and mission-driven small business lenders, and their partners, will converge in Chicago June 8 and 9 to learn and network at the 5th annual OFN Small Business Finance Forum. This year, the U.S. Small Business Administration’s microlending training program will be held concurrently with the Forum, nearly doubling the amount of small business lenders and experts at the event.
To learn more about why the two programs have joined forces, before he left SBA for the Consumer Financial Protection Bureau (CFPB) in April, CDFI Connect caught up with Grady Hedgespeth, then Director of the Office of Economic Affairs which runs SBA’s Community Advantage and Microloan programs.
You’ve attended the Forum since its inception. What is its value to the industry?
This is one of the few places where the focus can be entirely on small business lending to entities that can move the needle in our communities. The folks who attend have the potential to expand and take advantage of broader opportunities from training that provides essential building blocks for a solid economy, as well as a sound trading relationship with the broader economy.
Why did SBA decide to join OFN at the Forum?
Until now the SBA training event has taken place every two years. With the turnover as well as the exchanges and modifications that take place in this program, it is difficult to keep everyone up to date under this schedule. So it starts with a need: in this industry we need the opportunity to connect and exchange great ideas, and we need to do it annually. This is how we keep momentum going to advance the quality of microlending technology as development and tech emerges as a major player in the industry. In addition, we saw a great opportunity for synergy with what OFN has been building in the small business lending sphere.
What will participants get out of the Forum?
Chief among what they will gain is new ideas, including ways to do their business better. I hope they will also meet colleagues—brothers and sisters in arms. Many of the participants don’t just do this as a job but as a calling, and sometimes it can be difficult and frustrating work. The connections they are able to make with like-minded folk in different parts of the country carry over to strengthen their resolve, even in between conferences. We’ve seen it happen in our training, and it will only increase as the program connects with OFN and this group of mission-driven lenders.
I also think another very important aspect about OFN and SBA coming together is a chance to look at what our, the SBA’s, role is in shaping the future of the industry. Congress intended for us to be a rationalizing force in microlending in this country. OFN is at the forefront of getting the CDFI industry to scale. I think through this kind of training model offered with OFN, together we can figure out how microlending and Community Advantage can be a capital ladder of opportunity for small businesses, and bring it to scale. Training is a critical piece of it and it starts with a microloan. We want to arm all intermediaries to what it takes to develop that ladder, all the way up to a $5 million SBA loan.
What makes this the event that takes small-dollar lending to scale?
I learned long ago in my first stint at the State level that plagiarism is totally in the public interest. We, as good stewards of public resources, should be trying to plagiarize best practices and speed dissemination as much as we can. When you get right down to it, this is about highest and best uses of resources. Convenings are not something that the government excels at doing, We are not really set up for it. But we see the power of bringing people together focused on these issues. Congress intended us to work through the best nonprofits to get our training done, so in some respects this is like returning to what Congress envisioned for us in the first place when they gave us dedicated funds to support training.
OFN is not only one of the best conveners in the mission lending business but also an intermediary with an appreciation of what it means to lend to lenders, and what constitutes good lending and the best in class. This training will result in a smarter, bolder, more accessible SBA.
What else can participants expect from this year’s forum?
We will have intermediaries coming out more excited than ever, learning more than ever, and hopefully news of a system—specifically an electronic data support system—which, if it happens, will almost ensure we will have to do this again next year. We are hoping to convince Congress to allow us to take training fund allocations to redo antiquated reporting that drives our training agenda. We think our connection with OFN is a smarter way to do this training, and we have a compelling case for Congress that technology has advanced to the point where there is no reason why submitting quarterly data to the SBA can’t be more streamlined. This is part of what we will be talking about at the training session. Hopefully, come next year, we will be talking about how to work with the new system and be more efficient.
Grady plans to be a participant in this year’s Forum in his new role heading up Small Business Lending for CFPB.