A new bank with some familiar faces aims to partner with small business
When Dave Rauwerdink and Russ Schuler were at Security Bank in Sheboygan in the early 1980s, they grew a small, independent bank into one of the Top 25 Small Business Administration lenders in the country.
That emphasis on lending to small business made the bank attractive to First Wisconsin Corp., which bought out the Sheboygan bank in 1986. With Rauwerdink and Schuler staying on, the renamed Firstar Sheboygan continued to be a leader in originating SBA loans, stressing a partnership approach with its small business customers. Creativity and flexibility were at the core of their philosophy of making loans that work for business owners.
But like a 1970s rock band that sees its time come and go, eventually the management team broke up, as the larger corporate organization cared less and less about small business loans of $1 million or less. Rauwerdink left three years ago to become an independent consultant. Schuler left in April 1998 for early retirement. In January of this year, Kevin Tenpas, who had been head of business banking in Firstar’s northeast region in Green Bay, also departed.
The forces were circling for a Sheboygan reunion tour.
In March, the trio formed Wisconsin Business Bank, with a sole emphasis on lending to small and medium-sized businesses. Tenpas is the president, while Schuler is chairman and CEO.
Rauwerdink remains behind the scenes as a strategic adviser. Of the bank’s 17 employees, 13 are former Firstar
Sheboygan bankers.
“If you go down and add it all up, there’s a lot of experience here,” says Tenpas, who works out of Wisconsin
Business Bank’s Green Bay office. “We hang our hat on creativity and flexibility and commitment to our small business customers. “We are finding that people are looking for an alternative to the big banks.”
Rauwerdink’s relationship with Lynn Fuller at Heartland Financial USA – a $960 million financial services company headquartered in Dubuque, Iowa – helped Wisconsin Business Bank hit the ground running.
Heartland Financial was looking to expand in Wisconsin, and Rauwerdink was able to put the two parties together. Rather than go through the time-
consuming process of applying for its own bank charter, which would have set back its opening, Wisconsin Business Bank affiliated with Heartland’s Wisconsin Community Bank of Cottage Grove.
By partnering with Heartland Financial, Wisconsin was able to hire a complete staff and open multiple locations almost instantly. Tenpas works out of Green Bay, which is the bank’s northeast Wisconsin office and counts part of Upper Michigan as its territory. There is also a loan production facility in Oshkosh, and another in Eau Claire, which covers western Wisconsin. Not bad for a bank that opened four months ago.
“Thanks to Heartland and Dave Rauwerdink, we were out of the blocks fast,” adds Schuler. “Our primary focus is business – taking care of the owners – so we don’t need expensive brick and mortar locations on street corners.”
Schuler says the bank has the potential to reach $300 million in assets, which would be quite a feat with just 17 employees.
Wisconsin Business Bank is headquartered in an unusual location, occupying 4,600 square feet within a 30,000-square-foot building in the Sheboygan industrial park. Its sign is visible from I-43.
“We are a business-focused bank, so we thought an industrial park location would be perfect,” Tenpas says. “Many of our clients have traditionally been from outside the Sheboygan area, and we typically go to meet them at their place of business. If a Milwaukee-area client is driving north to Door County, at least he or she will be able to see our name on the building.”
Getting to know you
Mike Kiser, district director of SBA’s Wisconsin office, credits the Sheboygan bankers with having the savvy to take advantage of SBA-guaranteed loans in a very efficient manner.
“What makes them stand out is that they really take the time to understand small business and how closely-held companies operate,” Kaiser says. “They know how to structure financing to help a small business grow and expand.”
Tenpas points to recent financing the bank set up for a client who acquired a business in Washington County. Wisconsin Business Bank utilized an SBA loan package and assisted the customer in working with the Wisconsin Department of Commerce to obtain 4% financing for future growth.
“Many of the big banks have gotten away from that creativity and flexibility,” Tenpas says. “Big banks don’t have the resources. They tend to make more conventional three-year term loans with a shorter payback of five to seven years.”
What often happens when entrepreneurs start their own businesses is they try to minimize debt by putting all of their own money into it, Kaiser says. Six months down the road, they find they require more operating capital, and they can’t get a bank loan because they don’t have any of their own money left to put up.
An SBA term loan allows the small business owner the room to grow and use his or her own capital. That helps owners withstand the inevitable ups and downs of running a business.
“What we usually tell clients is, if you have a 10-year committed SBA loan, that’s better than having a three-year balloon note,” Tenpas says. “Depending on where you’re at in the cycle of your business, it may not be the best time to be negotiating with your bank.”
One of Wisconsin Business Bank’s specialties is in cash management products and services, owing in large measure to Pam Dekker, another Firstar Sheboygan alum who has experience relating to business operations and cash management. With a new Internet banking product, Wisconsin Business Bank customers can bank very comfortably from a distance, whether located in the UP or in Mondovi. A clearinghouse service allows a business to make a deposit at a local bank, and transfer funds on a daily basis.
Wisconsin Business Bank’s average loan size is $1 million. Most of its activity centers around refinancing existing bank loans that businesses have on their books. With the muscle of Heartland Financial behind it, Wisconsin Business Bank’s legal lending limit is $10 million to any one company.
