Are delinquencies emerging as a problem for SBA lenders?

We have not seen that in our portfolio. We have about $600 million in SBA 504 loans and our currency rate is still in the high 90s. But I keep waiting for the other shoe to drop. I think delinquencies are low because the real estate market is still going strong. A business that gets into trouble can sell its building, so it never becomes a loss. If we had a real estate recession, though, it would be more difficult.

Is there some operational feat that accounts for CDC's standing in SBA lending?

The founder of the company, Art Goodman, was a good entrepreneur who spent 20 years building it into a very successful nonprofit organization. Great relationships with lenders is the key. It’s our heritage too, like Bank of Commerce. San Diego is the birthplace of SBA lending. There's more competition, more knowledgeable lenders, more innovation, more development of secondary markets than any other place in the country.

Five years from now, we’ll be surprised that SBA lending...

...is all done electronically and with centralized processing.

What keeps you up at night?

I’m very concerned with the direction that SBA is going. I’m not certain that Washington understands how the market works, and what value organizations like ourselves bring to the marketplace. You have delivery choices in how to serve the market. We can worry about providing ties to small businesses, new projects, programs banks can’t provide alone and bringing needed value in the market. My biggest fear is the SBA could destroy that success .... It’s imperative to educate the SBA and Congress as to what we have developed in Southern California. Don't fix something that isn’t broken.

— Richard Acello