Small Business Is Big for CIBC. (Small Business and the Banks)

Article excerpt

Executive Vice President, Small Business Banking, Canadian Imperial Bank of Commerce

CIBC revamps to pursue big opportunities in growing small business sector. Excerpt from evidence to the House of Commons Standing Committee on Industry, Science and Technology, Ottawa, November 21, 2001.

CIBC's definition of a small-business customer is anyone who depends on their business to generate their personal livelihood, who is self-employed or employs others, and whose personal and business affairs are intertwined. Our overall strategy is to provide an integrated offer that addresses both the personal and business needs of these customers. This means we do not simply deliver a menu of products. Instead, we have created an advisory service that addresses all the individual and business requirements of clients through a single team-based point of contact.

CIBC has undertaken a number of changes during the last 18 months to allow us to deliver such an offer. Our first step was to establish a specific business segment whose entire responsibility was to serve our 350,000 small-business customers, and I'm head of that division. Many of the 2,000 professionals in my area have been reorganized into teams to improve how we meet both the business and personal financial services needs of our clients as well as to establish better account relationship continuity.

One of the most common complaints by small businesses is that as soon as they get comfortable with their account manager, we go ahead and promote them. Our clients then have to invest valuable time educating someone else about the key drivers of their business. This problem has been particularly acute in urban areas. By making a team of three people responsible for all financial needs of a group of small businesses, we are tackling this irritant head-on. Even if one member of the team moves on, there will still be at least two others who know the client and can maintain the continuity of that relationship. I believe we're the only financial institution in Canada today that has undertaken such a program.

These units are made up of skilled professionals. Almost 90% have completed the Canadian securities course, and 52% have passed the professional financial planning course. Forty-four percent of the people making up these teams are women.

Excessive paperwork and access to funding have also been major issues for small business. We have undertaken several initiatives to resolve this. First, we have dramatically simplified the approval process for overdrafts and lines of credit. In cases of loans under $100,000, the process looks similar to a credit card application, with a guaranteed 48-hour turnaround. We have also reached an agreement with Wells Fargo in which small-business customers who have applied for a loan up to $100,000 can agree to be referred to Wells Fargo in cases where they don't qualify for a loan with CIBC. Two-thirds of all small businesses have borrowing needs of less than $100,000. CIBC's customers will complete a simple application that includes a direction to refer a loan request to Wells Fargo should it not be approved by CIBC. Our objective here is to help customers get greater access to capital.

We are also working more closely than ever with our risk management colleagues to build greater flexibility and a longer-term perspective into our credit decisions. This issue is very relevant in light of today's much more challenging business environment. While I cannot say that we will be able to reach a solution for every client who experiences financial difficulty, I can assure you that our first approach to anyone in trouble is to examine what measures we can take to help them remain in business. This is also handled very much on a case-by-case basis. That means there are no broad, bank-wide policies that dictate our approach to credit issues for the small-business segment.

I am pleased to report that all these efforts are already bearing fruit. …