Philly bank honored for actually making loans
Valley Green targets small business
Philly bank honored for actually making loans
Joseph N. DiStefano
Northwest Philly-based Valley Green Bank grew 41% last year, to around $260 million in loans and investments, and plans to grow another 25% this year, says boss Jay Goldstein.
That's unusual, at a time when larger U.S. banks have been sluggish at extending credit to businesses, given near-record low interest rates, weak demand, tough compeition, and disappearing profit margins.
Valley Green is also a rare institution -- one of just 14 based in the Philadelphia area -- that reported more than one-quarter of its outstanding loans are to small businesses, according to Amir Kassar, a former Advanta Corp. executive who now runs Blue Bell business loan broker Multifunding LLC, which honored Valley Green as the largest such bank based in the city today.
Most of the banks on Kassar's list are growing only slowly. What's different at Valley Green is a supportive and well-connected board of directors - led by chairman Algot F. Thorell Jr., ex-head of Lincoln Benefits, and including real estate broker Robert Elfant, Homecare Associates boss Karen Culp, Trolley Car Diner owner and developer Ken Weinstein, Saul Ewing law partner and ex-Pa. state Rep. Richard Hayden, among others -- plus 300 local shareholders -- who keep adding to their personal investments in the bank's capital, Goldstein says.
Valley Green hedges its bets, working with the city- and Chamber of Commerce-backed Philadelphia Authority for Industrial Development on credits to manufacturers like Zitner's Chocolates, and also making loans guaranteed by the federally subsidized Small Business Adminstration.
Banks that lend mostly to real estate development project remain "hestitant," Goldstein told me, given the continuing drop in property values. Banks are "feeling more comfortable"making business loans secured by accounts receivable or inventory. There are good risks, for lenders with enough capital, he added. In Valley Green's case, "we have plenty of room to grow."
