Inside America’s Top Small Business Bank

Forbes

When it comes to government-backed small business loans, a little known $14 billion tech-focused bank in North Carolina called Live Oak dominates. Unfortunately Wall Street pays it no respect.  Read the full story on Forbes: https://www.forbes.com/sites/brandonkochkodin/2025/07/18/inside-americas-top-small-business-bank/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00today on forbes inside america's top small business bank if small business is the beating

00:07heart of the american 30 trillion dollar economy then it might be surprising to find out that the

00:12lifeblood it counts on in the form of funding via loans comes not from wall street's mega banks like

00:18jp morgan wells fargo and bank of america but from a tiny branchless bank in wilmington north carolina

00:25just seven miles from michael jordan's boyhood home founded in 2008 live oak bank shares has 1053

00:34employees 14 billion dollars in assets and a 1.5 billion dollar market capitalization

00:41since 2017 it has issued 15.4 billion dollars in government-backed 7a loans more than any other

00:49bank in the country including the aforementioned wall street heavyweights the 7a program is the

00:54small business administration's flagship offering designed to help small businesses that might not

01:00qualify for conventional credit live oak's average loan is just one million dollars chump change for

01:06bigger brand name competitors but the lender does around two billion dollars a year in sba loans

01:12plus another three billion dollars in conventional small business loans live oak doesn't look or act

01:18like a typical bank and that's the point its 85 acre campus in wilmington is surrounded by long

01:25leaf pines not oaks in a boreal misnomer no one seems bothered by the four main buildings are styled

01:32more like a silicon valley startup than a bank with cypress siding exposed wooden beams and not a marble

01:38column or roll top desk in sight and of course it has the requisite full gym and health clinic on site

01:46rocking chairs line patios that overlook an 8.5 acre retention pond big enough to be mistaken for a

01:52lake one of the only visual clues that this is the south not south of san francisco live oak has no

01:58branches all deposits come in online and while most people think of small business lending as a handshake

02:05deal at the local bank down the street live oak has flipped that on its head it leans on tech instead of

02:11geography with a fintech venture arm called live oak ventures and a track record that includes

02:17spinning out the 3.4 billion dollar market capitalization cloud-based banking software firm

02:23encino that edge in technology helps it approve loans faster which means it can make more of them

02:30the lender does other mission critical tasks differently as well loan officers don't earn

02:35commissions a move designed to avoid conflicts between sales and credit

02:40the bank also doesn't try to be everything to everyone it sticks to industries where it has

02:45subject matter expertise the bank started by lending to veterinarians because its ceo chip

02:50mahan's stepfather is a well-known equine vet today live oak focuses on 35 industry verticals

02:58including home health care funeral homes and auto repair

03:01that deep industry knowledge shows up in the details ryan cave a business broker who runs sunbelt

03:09business brokers of south florida and has been in the business for 20 years says live oak stands out

03:14for pairing domain expertise with practical deal making he's worked with the bank on dozens of

03:20transactions from quick service restaurants to franchises few lenders would touch cave says quote

03:26they're not box checkers they're problem solvers it wasn't until the rise of the internet the mahan

03:33saw an opening to build something entirely new teaming up with his brother-in-law a security

03:38software expert he helped launch the world's first online bank atlanta-based security first network bank

03:44in 1995. the company offered online bill pay basic banking and even stock trading all through a dial-up

03:52connection the bank itself was sold to royal bank of canada in 1998 for 20 million dollars the real

03:59prize though was its technology it spun off a software unit known as s1 corporation which became a major

04:06provider of online banking infrastructure and was acquired by aci worldwide in 2011 for 520 million

04:13dollars in cash and stock mahan had found his playbook use technology to rethink old banking models

04:20for full coverage check out brandon kokoden's piece on forbes.com this is kieran meadows from forbes thanks for tuning in

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