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As a part of it’s previously announced plan to appoint more than 1,000 small business bankers across the country by mid-2012, Bank of America Corporation (BAC - Analyst Report) announced the recruitment of 30 such bankers in Washington. Of these, 10 bankers were employed in the Seattle metro area.
BofA’s decision to hire small business bankers throughout the country stems from the fact that small businesses were facing difficulties in obtaining expertise on how to run operations and maintain finances. Hence, during early 2010, the company announced its plan to hire a wide number of such bankers.
According to the U.S. Small Business Administration (SBA), in Washington there are approximately 532,160 small businesses. These businesses account for more than 97% of all employers and employ over 50% of the private-sector workforce.
The owners of small businesses often face unique and complex financial demands. To understand the unique needs of these small business owners, customized guidance and constant attention of small business bankers are very much needed. Therefore, BofA is hiring these specialized bankers to tap the huge demand for personalized help in the region.
Through BofA’s small business bankers, small business owners will be able to access local expertise and a dedicated resource that properly understands its exclusive needs. Small business bankers will evaluate the business owners’ credit, deposits, payroll and cash management needs besides providing proper guidance. This, in turn, will enable these businesses to manage finances in a better way and work more efficiently.
According to BofA, small businesses are critical to the development of the economy as a whole. In spite of their significant contribution to the economy, these do not have access to better banking facilities. Therefore, the company took such an initiative to sort out the problems faced by these and provide the owners with assistance to smoothly conduct their business operations.
In its efforts, BofA has been constantly pursuing active lending to small-scale firms. In the first quarter of 2012, the company extended approximately $106 million in credit to small businesses across Washington.
Moreover, BofA has been actively contributing to the Community Development Financial Institutions (CDFI) program by providing $200 million worth of finance to small businesses, which do not qualify for conventional loans. The CDFI program was initiated in 2010 to help some 9000 odd small businesses and maintain around 14,000 jobs.
Much like BofA, JPMorgan Chase & Co. (JPM - Analyst Report) is trying to accelerate the economic recovery by lending to small businesses. In the first quarter, it provided credit of more than $4 billion to small businesses and offered loan and raised capital of more than $445 billion for its commercial and consumer clients.
Currently, BofA retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain our long-term ‘Neutral’ recommendation on the stock.