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In meetings with bankers across the state, a common theme is the competitive environment in the small business lending area. We are often asked how we handle referrals and manage competition among our various lending partners. Clearly, as a consortium of 146 banks, we cannot favor one over the other.

The vast majority of the loans we consider come to us as a result of a referral from a lending partner seeking to share the risk on a challenging credit, rely on our expertise as SBA 7(a) lenders, obtain below market financing for customers that are zone certified businesses or access the 504 loan program. Our SBA 7(a) and conventional loan referrals are almost always referred to us by a lending partner. However, direct inquiries from or on behalf of the borrower, including inquiries from economic development professionals about the 504 and Empire Zone loan programs, are increasing as these programs become more widely known and accepted. Additionally, our web site generates interest in our loan programs.

We have been well served by a few simple policies that help us maintain the delicate balance necessary to serve our lending partners fairly despite the intense competition. If we receive a direct inquiry from or on behalf of a borrower, we first seek to determine whether the borrower is working with a lender on the project.

• If the borrower is working with a lender, we work with that lender until the borrower advises us not to.

• If the borrower is not working with a lender, we ascertain the borrower's bank (or banks) of account and refer the borrower to its bank (or banks) of account for the transaction. If the borrower has no credit relationship with its bank of account, we provide a lender contact at the bank of account.

If the bank of account requests us to consider participation in the project or the borrower requests that we work with a particular lending partner, we honor that request. We never steer or direct a borrower away from the lender that brought us into the transaction.

While our mission is to provide access to capital for small businesses in New York State, our goal is to do that in participation, not competition, with our lending partners. Our loan policy requires that we seek a partner in each and every transaction. In those rare cases where we proceed with the transaction without a lending partner, we require, as part of our approval process, an explanation for the absence of a lending partner and continuing efforts to identify a lending partner subsequent to the approval.

We rely on referrals from our lending partners and recognize that lending partners must be confident of our support and loyalty in consummating the transaction. There is no question that we must be able to generate revenue to support our operations, but this is not the only or best measure of our success. The most important measure is how well we support our lending partners' efforts to provide access to capital.