St. Pete bank becomes small business lending leader

National Small Business Week begins April 28 and highlights the local economic impacts of entrepreneurs who drive innovation and create nearly two out of every three new jobs.

Over half of Americans either work for or own a small business, and every president since John F. Kennedy has issued a proclamation recognizing those critical contributions. St. Petersburg-based BayFirst bank is helping foster that success, and is now Tampa Bay’s top U.S. Small Business Administration (SBA) lender.

BayFirst also ranks second nationally for the number of loans generated. Kiril Dimov, small business loan director, said most are much-needed “small-dollar” amounts of less than $150,000.

“Small business loans are basically helping – not to be cliché – the backbone of America,” Dimov said. “There’s a large percentage of businesses out there that started as mom-and-pop ventures that, essentially, don’t get attention from the big banks.”

The SBA offers qualified small business owners up to $5 million to stay afloat and expand operations. However, the National Association of Government Guaranteed Lenders recently found that demand was greatest for exponentially smaller amounts.

In 2023, loans less than $50,000 accounted for nearly 30% of all SBA approvals. Over half of those were under $150,000.

BayFirst has emerged as a national leader in that segment. The local community bank originated nearly 2,500 loans of $150,000 or less last year, with the total amount disbursed topping $321 million.

“Programs like the SBA are specifically for helping and supporting those folks who may not get that special attention from larger financial institutions,” Dimov said. “It’s a way to spur the true community, and small businesses are our community.”

Many large banks eschew small-dollar loans due to time and resource requirements outweighing the perceived risk and return on investment. The Philadelphia Inquirer recently attributed increasing small business borrowing challenges to historically high-interest rates.

Dimov said that prevents the “coffee shop down the street” from expanding and a newly licensed plumber from hiring their first employee. He believes small-dollar loans “give the little guy a voice.”

Kiril Dimov, small business loan director at BayFirst.

Dimov said institutional lending practices often force small business owners to accrue exorbitant debt. He noted that $150,000 in annual revenue may qualify them for a $300,000 loan.

“But is that appropriate for the business?” Dimov continued. “Sometimes it’s not. They could fall into this unfortunate situation where they get convinced to take something that might actually be detrimental … rather than improve their future financial success.”

BayFirst’s Bolt product provides SBA loans of up to $150,000 for working capital within days. Dimov also stressed the importance of the program’s educational component.

He said BayFirst is focused more on serving as many businesses as possible rather than individual dollar amounts. Dimov credited that emphasis for the community bank’s regional and national success.

He noted the preponderance of small businesses that line St. Petersburg’s Central Avenue and how those hubs of local economic activity exist throughout the nation. “And we want to give them the same attention that we give to our community here in Tampa Bay,” Dimov said.

Dimov encourages small business owners not to get discouraged by current market conditions.

In March, the Small Business Optimism Index reached its lowest level since December 2012. The National Federation of Independent Business cited inflation, increased capital spending and tight credit and labor markets for the economic pessimism on Main Street.

Dimov said many large banks and lenders “won’t even sniff” at a business loan request under $500,000. He also noted that many owners just need $75,000 to launch a marketing campaign or make their rounds on the local festival circuit.

“Again, those businesses are so important to communities and vital to the entrepreneurs’ lives and the people around them,” Dimov said. “There is a resource out there – there is help out there.”