M&T Bank Corp. chairman and CEO Robert G. Wilmers believes strongly in the power of small businesses.
He points to the rise of Moog Inc., New Era and Under Armour – all of which are M&T customers – from fledgling startups to thriving companies, driven by determined entrepreneurs.
But Wilmers worries government regulations are creating too great of a burden for new small businesses to follow suit.
"It's no wonder that in an environment where the deck is seemingly stacked against small businesses, fewer of them are growing or even forming," Wilmers said Tuesday at the bank's annual shareholders meeting, which drew more than 250 people at M&T's headquarters. "With regulation stymieing them, it's impossible to know what we're missing – the successors to Moog, New Era and Under Armour that never had their chance."
Wilmers devoted almost all of his speech to his concerns about the obstacles small businesses face, citing complaints M&T has heard from its customers.
"The importance of government policies that favor the formation of small businesses and cultivate the human capital to sustain them cannot be overstated," he said. "For the sake of our communities and for our future, it's time to listen and it's time for action."
From 2003 to 2007, an average of 529,055 startups were established each year, Wilmers said. That annual average dropped by 25 percent from 2010 to 2014.
M&T's small business customers consistently mention three main obstacles to growth: a shortage of entry-level labor, the rising cost of labor and "burdensome regulation."
Small business owners struggle to understand the regulations they're subjected to, which distracts them from developing their ventures, Wilmers said. Complying with the regulations is just as complex and costly, he added.
Wilmers took aim at the Small Business Administration, saying the federal agency is "under-delivering on its mission to ensure the availability of capital to small businesses and strengthen their ability to contribute to the U.S. economy." He made similar criticisms of the SBA at last year's meeting.
M&T is a leading participant in SBA loan programs. But Wilmers said the agency's lending requirements have grown too complex, and that too many of the loans originated through the SBA are for $2 million or more, far beyond what a small business might need "just to open its doors or fulfill that first big order."
After the meeting, Wilmers praised the SBA's Buffalo district office and its director, Franklin J. Sciortino, but added that Sciortino "doesn't call the shots" when it comes to SBA policy decisions.
In other comments, Wilmers said:
– M&T has benefited from the disruption caused by KeyCorp's deal for First Niagara Financial Group last year. "We've gotten quite a bit of business because of that process. We're the hometown bank, and we've worked very hard over the years doing what we could for Western New York in particular but all our communities in general. I think one way or another, our clients appreciate it."
– Share buybacks are "probably a more efficient use of funds than paying out dividends to our shareholders. It's proved a better return over the long run." Under M&T's capital plans, M&T has the capacity to repurchase an additional $231 million of common stock by the end of the current quarter, he said.
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