The Pain:
The company, the Dallas division of a national firm, was having a hard time finding people to apply for its SBA loans. Because these were government loans, many borrowers shied away from dealing with what they believed was a serpentine loan procedure. They viewed the SBA loan process as painfully slow and full of roadblocks. On top of that, they felt it was an expensive exercise. First Commercial Capital, however, understood this perception. It had a good inside reality. It had innovated this difficult process. The company hired very experienced loan officers, each with at least 15 years of experience in the SBA area. They had looked at hundreds of loans and could tell with 99 percent accuracy who would be accepted and who would get the thumbs down. If the applicant had potential, they could explain what the file needed to ultimately receive the funding.

This company charged no fees to get the lending process started. Their applicants brought in the requisite materials and the loan officers would do the packaging for them. The borrower did not have to spend any money until the loan was ready to go.

First Commercial had a very specific clientele. It only wanted to lend to existing businesses; it was not interested in start up companies. It wanted to find companies that needed money for business expansion, a new building (including the cost of acquiring land as well as the construction loan), and new equipment.

These requirements were so narrow, the company couldn’t target to the mass business market. We couldn’t send out a mass mailing because their borrowers were so tightly defined. To solve this marketing problem, First Commercial Capital was spending $70,000 a year on telemarketing using a California firm. In 1994, that sum had generated 67 leads and two loans. Not a good return on its investment. Ken Kroviac, the vice president in charge of this branch, called us for help.

The Solution:
We explained what we could do for him. That led to an argument! The senior loan officers said, “There’s no way your ideas can work.” They were very conservative and thought our ideas were too radical. But we explained that they had just wasted $70,000.

We developed three ASAs:

1. SBA loans take too long.
2. SBA loans have hidden fees.
3. There are a lot of hassles in applying for an SBA loan.

First Commercial Capital eliminates all of these!

We wrote a special report about how this company makes applying and receiving an SBA loan a breeze. We discussed how it innovated its lending practices to overcome these problems. The report also explained the difference between personal, commercial, and SBA loans since the target market seemed to be confused about the three different products.

Then we penned a one page letter that promoted this special report. Interested borrowers had to call the loan office for the report. We faxed this letter to 7,000 businesses in our general business database.

In two weeks, First Commercial Capital received 117 requests. From those interested readers, the company closed nine loans worth $22 million. What a great investment on a $2,000 fax.

However, the conservative company didn’t want to continue our successful program. The executives just didn’t get it. If we had continued our marketing campaign, we would have run ads in the local business journal and done more target marketing.