Fifth Third's commitment to businesses, especially small businesses, is anchored in the belief that an environment conducive to business success is a key driver in the building and maintenance of strong and sustainable communities.
Not only does robust business activity enable a healthy supply of products and services to meet demand, but it also boosts employment opportunities for residents. Fifth Third's primary service to businesses is as a lender and provider of quality depository and efficiency services that enable businesses to run at high capacity.
Fifth Third also is working to become a Top 15 Small Business Administration (SBA) lender. In 2016, Fifth Third's SBA lending was $138.7 million. SBA loans offer many benefits for small businesses, including fixed and variable interest rates with flexible terms, the ability to finance loan closing costs and lower down payments on commercial real estate.
Fifth Third offers may types of SBA lending options, including SBA Express Loans, which feature simpler application processes and faster approval than 7(a) general purpose loans. Fifth Third's SBA Express Loan production was $20.1 million and increased 6 percent in dollar volume year-over-year.
Helping Businesses with SBA Preferred Lending
A survey* commissioned by Fifth Third Bank in 2016 revealed a significant gap between small business owners' knowledge of the Small Business Administration and their use of SBA services. While most of those surveyed had heard of the SBA, only about 13 percent had used education resources on the SBA website, and less than seven percent had actually applied for an SBA loan.
"We really want to clear up any misconceptions about the SBA loan program and show small businesses that getting a loan may be much easier than they realize," said David Jackson, national director of SBA Lending at Fifth Third Bank. "In 2016, we helped business customers start their business, expand their business, acquire another business, finance equipment, purchase real estate and so much more—all through SBA loans."
*Based on a survey of 500 U.S. small business owners with annual revenues below $10 million conducted by Research Now and commissioned by Fifth Third Bank, 3/24/2016 – 3/28/2016.
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS
In 2016, Fifth Third took a giant step forward in its commitment to working with Community Development Financial Institutions (CDFIs). The Company made a $465,000 grant to Accion, a global nonprofit dedicated to building a financially inclusive world with economic opportunity for all by giving people the financial tools they need to improve their lives. Accion is the nation's largest nonprofit microfinance network.
The grant from Fifth Third will be used to support lending to underserved small businesses in Illinois, Indiana, Florida, Michigan and Ohio, and support financial education activities to help small business owners learn and network. Fifth Third and Accion are working to strengthen the referral partnership that will allow Fifth Third bankers to provide small business customers that may be too small for the Company to serve with a second-look loan through Accion.
Eighty percent of the $465,000 grant will be used to provide lending and technical assistance support to small businesses in the identified states. Twenty percent will be utilized for technology and process improvements to further scale lending and referrals, financial education activities, administration and communication. Fifth Third also will be developing digital content and conducting webinars on financial topics that can be accessed by Accion's 13,000 e-newsletter subscribers to provide additional educational support for small businesses.
Financial education with Accion is aligned with the Fifth Third's ongoing commitment to financial empowerment. During Small Business Week in May 2016, its team members hosted nearly 40 events that were attended by 3,500 small business owners and entrepreneurs. Fifth Third's Kala Gibson, senior vice president and head of Business Banking, also hit the airways to deliver workshop content and tips to hundreds of thousands of radio listeners.
Fifth Third approaches diversity as a strategic imperative. It is relevant in its supplier network and in all other aspects of the business. Fifth Third is committed to identifying additional diverse suppliers, providing access to financing for undercapitalized businesses and investing in building supplier management capabilities.
The Supplier Diversity leadership team has developed a multi-year plan for the growth and expansion of Fifth Third's supplier diversity efforts. It includes the education, training and development of minority-owned (MBE), veteran-owned (VOB) and other businesses in order to build a more robust pipeline, educate on the request-for-proposal process and support community organizations providing technical assistance and training. Fifth Third also supports programs that assist diverse suppliers in accessing capital, and accessing the internal support to assist them in competing for Fifth Third's business on a fair and equal basis.
Supplier Diversity Summit "Doing Business"
Summit has two definitions: An important meeting between two governments or organizations, or the peak of a mountain. When Fifth Third held its second annual Supplier Diversity Summit in August 2016, it had both definitions in mind. Not only was it an important meeting to foster deeper relationships with minority-owned, women-owned, veteran-owned and other businesses, it also brought the summit of the Company's Supplier Diversity strategy into view for all who attended.
At the Summit, which began in 2015, diverse suppliers are able to engage with other suppliers on strategies to win business, learn about Fifth Third's strategic sourcing process and engage directly with Fifth Third's leadership about their business capabilities. Invitations were sent to a select number of suppliers that had the capacity and ability to meet Fifth Third's various service, solution and product needs. More than 35 diverse suppliers attended in 2016.
One of the speakers at the 2016 Summit was Steven Hightower, president and CEO of HP Energy, a wholly owned subsidiary of Hightowers Petroleum. HP Energy was awarded a $4.0 million contract to improve Fifth Third's environmental footprint through LED lighting, a project that was completed last year.
"In many instances, a project like this would not have been so collaborative. We could have simply been asked to submit a bid," Hightower said. "But Fifth Third had a different approach and made us an integral part of the process. They sat down with us to identify the solution that provided them with the best value. It was a partnership from start to finish, and that made the difference."
HP Energy identified that Fifth Third was eligible for $1.4 million in rebates from Duke Energy, along with a significant reduction in annual maintenance costs. The company then worked with the lighting manufacturer to extend the warranty from five years to 10," said Juan Munoz, chief sourcing officer at Fifth Third Bank. "It is this type of innovation and cost savings that solidifies the business case for working more closely with diverse suppliers."
President and CEO Greg Carmichael noted that the Supplier Diversity Summit goes beyond doing business with Fifth Third and also includes the opportunity for diverse suppliers to do business with larger vendors of the Company. "We are sending the message that Fifth Third is committed to promoting a culture that provides diverse suppliers the opportunity to compete for our business on a fair and equal basis. This is good business for us, our shareholders and our communities."
Hightower echoed these sentiments. "You have to run hard to compete with corporate America," he said. "Efforts like these help small businesses like mine compete at a higher level and prove that we can deliver on the service and value that corporations have come to expect."
In 2016, Fifth Third's year-over-year spend (from Dec. 31, 2015, to Dec. 31, 2016) increased 73 percent with more than 350 diverse suppliers. One such supplier is Urban Lending Solutions, a privately held company that provides products and services to lending companies like banks, credit unions and mortgage companies. Darlene Burnham, senior vice president of business development and sales for Urban Lending Solutions, said, "Deciding to partner with Fifth Third was easy. We have a lot of similar values. What we like best is that they not only say what they'll do, they actually do it and then prove it."
Fifth Third was named Class II Corporation of the Year by the Ohio Minority Supplier Development Council (OMSDC) in November 2016 and Teresa Tanner, executive vice president and chief administrative officer, was named to the National Minority Development Council (NMSDC) board of directors. These honors demonstrate that Fifth Third is delivering on its promise to expand supplier diversity efforts across its footprint. Fifth Third uses all possible resources—from its internal database to collaborations with the OMSDC, National Minority Supplier Development Council, Women's Business Enterprise National Council and other state and local organizations—to find diverse and talented suppliers.
GIVING & SUPPORT
Fifth Third and the Fifth Third Foundation are proud to put their financial resources into support of small business development. In addition to supporting Accion for lending and technical assistance through its 2016 donation, Fifth Third Bank also donated $53,000 to Accion Chicago in support of its micro loan pool. Accion Chicago provides one-on-one coaching to entrepreneurs to maximize their growth potential in addition to providing necessary capital to micro-enterprises.
In Michigan, Fifth Third provided $25,000 to the Small Business Development Technical Center for a statewide education program to assist businesses that have been operating for three years or more with resources to grow and expand their business. Fifth Third also works with the University of Georgia's Small Business Development Center. Fifth Third made a $20,000 grant for its program, which provides tools, training and resources to help small businesses grow and succeed. The University's program is designated as one of Georgia's top providers of small business assistance. It also provides the GrowSmart program to business owners to assist in the creation of a framework to improve the performance of their businesses and shape its success for the future.
Fifth Third also invested $20,000 in the Cincinnati African American Chamber of Commerce. The Chamber's mission is to establish, cultivate and strengthen consumer and business relationships; provide its members access to major corporate markets and assist in developing strategic partnerships to strengthen and grow the business community.
The Fifth Third Foundation made an $8,000 grant to the Avondale Comprehensive Development Corporation in Cincinnati, Ohio, to support its business attraction, retention and expansion project. Also in Cincinnati, the Foundation made a $10,000 grant to the Walnut Hills Redevelopment Foundation Inc. for its THRIVE business development grants. In Toledo, Ohio, the Arts Commission of Greater Toledo Inc., received a $5,000 Fifth Third Foundation grant for its Artist Entrepreneurial Initiative Extension Program.
In Florida, the Foundation made a $5,000 grant to Catapult Lakeland, Inc. for the launch of its micro-grant program. The University of South Florida also received grant funding for small business consulting and training. The Women's Entrepreneurial Opportunity Project Inc. in Atlanta, Georgia, received a $5,000 grant for its Building Bridges to Access Capital program. Mujeres Latinas en Accion in Chicago, Illinois, received a $5,000 grant to support its small business program.
Community Commitment Lending
The Community Commitment outlines a goal for Fifth Third of $10 billion in small business lending though 2020, including $2.5 billion in loans to businesses with less than $1 million in revenue. At the conclusion of the Commitment's first year, Fifth Third lent $1.96 billion to small businesses, or 19.6 percent of the five-year goal.
As Fifth Third works to achieve its lending commitment, it is striving to be the Bank of Choice in the small business community, and to be an industry leader with a focus on CRA small business lending with dedicated products, services, marketing, programs, partnerships and education.