Black Money: A Conversation with Mark J. Robertson of PCR Business Finance

Justin Minott from the African American Alliance of CDFI CEOs interviews Mark J. Robertson Sr., President and CEO of PCR Business Finance, focusing on his journey, mission, and the impact of his work. Here is a brief recap of this powerful conversation:

Justin: Could you walk us through how you got here? Give us the backstory.

Mark: My 49-year journey in financial services began right after high school in 1975 with a youth job program in retail banking. In 1980 I graduated from UCLA in economics. From there, I embarked on roles in commercial leasing and middle-market lending at Union Bank and later Security Pacific Bank, focusing on real estate lending. I then transitioned to Bank of California, which later merged with Union Bank. During my tenure, I volunteered at PCR Business Finance, eventually joining full-time in 1991 as a program manager. After four months, I was promoted to chief credit officer. In 2002, I became President and CEO, a position I've held for nearly 22 years. Reflecting on this journey, I've realized the unpredictability of life's path. While I didn't envision this role as a youth, the opportunities presented themselves along the way, shaping my career in unforeseen ways.

Justin: What an incredible journey. I'm curious, back when you were young and just starting out, did you ever envision yourself becoming the president and CEO of a significant CDFI like this? 

Mark: No, not at all. It's hard to imagine where you'll end up at 18. I just knew that banking aligned with my economics major in school, giving me exposure to financial markets early on. Interestingly, someone once predicted I'd become a bank president, which seemed far-fetched at the time. But here I am, leading a CDFI, essentially a non-depository bank. I'm grateful to be fulfilling that prophecy.

Justin: You're truly making a significant impact in our communities, and we appreciate your role. Mark, what drew you to the financial industry?

Mark: I’ve always been good at math, and economics fascinated me,  but what really intrigued me was understanding how money flows and how people generate wealth. During my time as a teller, I observed young kids with significant sums in their savings accounts, updating their passbooks with deposits and withdrawals. Coming from a single-parent household, where money was tight, this sparked my curiosity about wealth accumulation and legacy-building for future generations.

Justin: Why did you choose to focus on CDFIs?  And why did you initially volunteer at PCR, and what motivated you to stay in this space instead of pursuing traditional banking?

Mark: Traditional banking provided invaluable training, and my career was advancing as expected, given my education from a reputable university. However, I often felt constrained by a corporate environment that stifled creativity and individuality. Volunteering at PCR offered a reprieve—a chance to step back, contribute meaningfully, and witness the tangible impact of financial transactions on people's lives. It was during the real estate downturn of 1991 that I seized the opportunity to transition to PCR, leveraging my banking experience to serve my community in a more impactful way.

Justin: What continues to fuel your passion for the CDFI industry? What aspects of the work resonate with you the most?

Mark: The work we do, not just at PCR but across the entire CDFI sector, is truly impactful. The CDFI sector tackles challenges that larger banks avoid, focusing on affordable housing and overlooked businesses. Unlike my banking days, where transactions were often large-scale and impersonal, in the CDFI industry, borrowers recognize our dedication and support. This sense of connection and purpose is what draws me to CDFIs.

Now, diving into what PCR Business Finance specializes in, we truly pride ourselves on our unique position in the market. We're deeply committed to working hand-in-hand with business owners, providing tailored financial solutions that meet their needs. This personalized approach sets us apart and allows us to make a significant impact in the communities we serve.

Justin: Why focus on small businesses?

Mark: Small businesses often get overlooked by larger financial institutions because they're not as lucrative or glamorous. Yet, they're the backbone of job creation. Supporting them is crucial for economic stability. If we neglect small businesses, we risk significant repercussions on employment rates and the overall economy.

Justin: Can you share a client story that resonates with you?

Mark: Absolutely. A seamstress once cried when we approved her $25,000 loan—no one else would take a chance on her and this loan was a pivotal moment for her business. Another memorable story is about a childcare center in Watts. The owner, ready to retire, found no family to take over the business. So, a mother whose daughter attended the center, with help from PCR, bought the facility. Through our support, she is continuing its legacy in the community. These stories remind us why we do what we do, bringing profound impact to people's lives. 

Justin: Let's explore entrepreneurship through acquisition, as you mentioned. With more business owners aging out and retiring without successors, there's a growing opportunity in this space. This trend is creating a gap in our economy that's expanding daily.

Mark: Absolutely, there will be more individuals, especially from the baby boomer generation like me, who are nearing retirement and looking to pass on their businesses. However, they may not have interested family members to take over. In such cases, they may consider selling on the open market or preferably, offering the opportunity to loyal, long-term employees. This presents a significant opportunity for CDFIs to finance such transitions. Recently, PCR received a generous grant from Wells Fargo to support employee ownership of small businesses. With many in their mid to late 60s ready to retire, it's crucial to find ways to preserve these businesses and the jobs they provide. CDFIs are ideally positioned to facilitate this process.

Justin: Let's discuss some of the unique initiatives at PCR Business Finance.

Mark: At PCR Business Finance, we have unique initiatives that differentiate us. Notably, we administer the State of California Loan Guarantee Program, providing up to 80% loan coverage for small businesses. As the only CDFI SBDC combination in Los Angeles County, we also offer specialized programs like the Sister Entrepreneur Loan Fund (SELF), which empowers black women entrepreneurs through six months of financial literacy training and technology improvement grants. Additionally, we manage the Metro Business Interruption Fund, which has distributed $41 million to 460 businesses affected by rail projects, with an $8.5 million contract extension to support even more businesses in the coming years.

Justin: That's truly remarkable work you're doing. With your extensive experience in this field, what advice would you give to budding entrepreneurs embarking on their journey?

Mark: Record-keeping is paramount. Over the years, across various programs and initiatives, including direct lending since 1994 and SBDC support during COVID, we've consistently observed a common challenge: inadequate record-keeping among businesses. This not only impacts loan eligibility but also grant applications. My top advice is to keep records in order, file taxes diligently, and focus on profitability.

Justin: What do you see in the current economic landscape?

Mark: Interest rates charged by lenders, including CDFIs, are influenced by various factors, primarily risk and the lender's cost of funds. When our cost of borrowing is lower, we typically pass on those savings to borrowers. Moreover, being a CDFI allows us to access financial assistance through grants from the United States Treasury CDFI Fund. These grants often translate to zero-cost funds, enabling us to offer financing to borrowers at highly competitive rates. Our goal is not only to provide financing to small businesses but to do so at reasonable costs. This commitment often results in lending at or below market rates, benefiting our borrowers and supporting their financial needs effectively.

Justin: What does the future look like for PCR?

Mark: The future looks bright for PCR, Justin. We're experiencing some growing pains as we've tripled in size since joining AAA. PCR is growing rapidly; we aim to scale from a $30 million to a $50 million organization in three years. With support from US Bank, we're developing the Community Business Center in the Crenshaw district, featuring a shared workspace and community convening space. Construction starts mid-July, and we're thrilled about the future.

Justin: Do you lend in the construction industry?

Mark: We do provide working capital lines to contractors, although it's not our primary expertise. If there's a compelling reason for us to be involved, we'll support small contractors. Ideally, we prefer it if the contractor has a bank lender more experienced in lines of credit, and we can support them with a loan guarantee. However, we're flexible and will find a way to support them regardless.

Thank you for reading! You can watch the full interview HERE. Be sure to connect with Mark and follow PCR Business Finance to stay connected to the impact.