Who Will Fill the Small Business Lending Void Left by Firestone’s Exit?
By David Cohen, Former CEO of Firestone Financial
The engine of the U.S. economy is fueled by the millions of small businesses across our country. They are the essential component for the growth of our economy, employment and wealth creation for millions of owners and their families. As business owners across this nation, we go to work every morning with the goal to succeed in business, provide a valuable product or service to customers, and enable our employees to work, learn and provide for their families. What a great feeling at the end of each day, knowing that we are working towards these important goals. This is the dream for so many of us in America today.
Firestone Financial was founded in 1965 by two entrepreneurs, Michael Miller and Robert Fanger. The company provided equipment loans to small businesses in the greater Boston marketplace. Throughout its history, Firestone has provided billions of dollars of equipment financing to tens of thousands of small business owners across the U.S. There are literally thousands of businesses that may not have succeeded without Firestone at their side. I am proud of what Firestone accomplished for those businesses. Their success is our success.
“If you are not growing your business, you are dying,” said Warren Buffett. Providing the necessary finances to businesses is paramount to their ability to succeed. The ability to obtain equipment financing for small owner-managed businesses has not been easy, especially in some of the market segments that Firestone had been supporting.
Firestone navigated through many economic cycles and multiple ownership changes and thrived for 57 years, always profitably. Michael and Robert hired a young salesperson, Ed Yaffe, right at the start and together they developed and grew as a business.
Over time, Firestone’s executive team agreed to a set of core values. We worked every day to ensure all employees understood and worked hard to practice these values every day:
- Always do the right thing
- Build relationships that last
- Care about customers and employees
- Deliver superior service that meets or exceeds customers’ expectations
- Engage in finding solutions
- Foster teamwork and collaboration
Once you deliver on those values consistently, you cannot help but succeed.
I was proud to join the company in 1986 as the controller and over the next 14 years, worked closely with my mentors, Michael Miller, Bob Fanger and Ed Yaffe. Together, they provided me the opportunity to grow, learn and develop as the leader of the company. In 2000, I was appointed CEO and within a short time, I, along with the management team reacquired the business in 2001. Over the next 14 years, we grew the business, practicing those core values every day.
One day, we received a piece of mail from a customer with a message on the front of the envelope: “Small enough to care, large enough to serve.” We were so proud that a customer, sending in a loan payment, took the time to communicate their feelings about Firestone that we adopted that motivating message as our mantra.
In 2014, we were facing the need for additional capital to support the growth of the business. Our goal was to find a partner that had the same vision and desire to grow and support the core business of Firestone and believed in the same core values established by the management team. We negotiated a deal to be acquired by Berkshire Bank, based out of Pittsfield, Mass. I left Firestone in May of 2019.
Fast forward to 2022…Berkshire Bank’s senior management team and its board of directors decided to shut down Firestone Financial and close the doors after 57 years. Firestone will no longer provide the essential growth financing to thousands of customers across multiple industries. In so doing, Berkshire Bank is sending a message that it will not support small businesses’ need for equipment financing. The company called it “a strategic decision within the context of Berkshire’s BEST (Berkshire’s Exciting Strategic Transformation) plan to focus on its core community banking businesses within its markets.”
While this might not rise high on the media spectrum today, I believe we need to acknowledge the social and communal responsibility to support small businesses across the U.S. Berkshire Bank has made a statement that such support is no longer important to them. Yet, small business growth and success is the catalyst that drives our economy. Their decision to shutter the business, instead of offering the business for sale, makes no sense to me. The external and internal pressure on the senior management team at Berkshire Bank is just another example of a business that rides the “new wave” of politically correct messaging and leaves a truly remarkable business on the side of the road, creating a void for the industries and customers Firestone supported. I hope someone will step up and fill that void, supporting the thousands of businesses that are here today and will be here tomorrow, helping them fulfill the American dream.
David Cohen, a longtime leader of Firestone Financial who was with the company from 1986-2019 and served as CEO from 2001-2019, writes about the recent decision by Firestone parent company Berkshire Bank shut down its lending desk through that division. Today, he is CEO-in-residence at the Katahdin Group, a consulting firm that provides services to chief executive officers. He can be reached by email at [email protected].