Published June 2005

First Heritage lender
earns statewide SBA honor

By Kimberly Hilden
SCBJ Assistant Editor

Walter McLaughlin has spent the past 15 years working to grow First Heritage Bank’s SBA loan program, work that recently garnered him recognition as the U.S. Small Business Administration’s 2005 Financial Services Champion of the Year for Washington state.

“Obviously, I was pleased,” McLaughlin said of the honor, which he views as cumulative recognition for the work he and Snohomish-based First Heritage have done in serving the small-business community.

Under McLaughlin’s leadership, First Heritage’s SBA lending department has seen production rise from an average of 23 loans totaling $3.2 million before he arrived in 1990 to 77 loans totaling $16.5 million in 2003.

For fiscal year 2004, First Heritage ranked fourth among lenders in Western Washington for the amount of SBA 7(a) loans processed, at $15.3 million, and seventh in the number of loans processed, at 53, according to the SBA’s Seattle District office.

And McLaughlin, a senior vice president and head of First Heritage’s SBA department, expects the bank to place as high this year as well.

“Business has been strong, very strong,” McLaughlin said, noting that First Heritage’s SBA lending focus has centered on what he terms “job creation-type lending.”

“What we do will grow that business so that they will be able to borrow again,” said McLaughlin, whose department, based in Monroe, operates with a staff of three and is augmented by First Heritage’s other loan officers, all of whom are familiar with the SBA loan process.

“In the banking realm, there are a lot of lenders that don’t want to do start-ups; they’re deemed too risky, and we will do them,” he said, noting that 25 percent of First Heritage’s SBA-loan customers are, indeed, start-ups.

Another 25 percent are entrepreneurs seeking financing for real estate purposes, and the remaining 50 percent is made up of a general mix of businesses that already are operating in the community and need funding for a variety of reasons, McLaughlin said.

Although the bank, which is an SBA Preferred Lender, has worked with the agency’s 504 Certified Development Company Program, which focuses on financing for major fixed assets, the majority of its SBA business is through the 7(a) Loan Guaranty Program, McLaughlin said.

And while the SBA has made an effort in recent years to generate smaller loans, but more of them, First Heritage’s average loan size has remained steady, at about $250,000 to $300,000, he said.

Such loans, McLaughlin said, fuel economic development in a community, helping entrepreneurs build a business and create “something tangible out of an idea.”

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