FSC First CEO Dawn Medley Aims To Take The Business Support Agency To New Heights—And She’s Already Begun To Make It Happen

By Raoul Dennis, Kristina Townsend and D.A. Phillips

On January 1, 2023, Dawn Medley began her position as president and CEO of FSC First, a community development financial institution (CDFI) as designated by the U. S. Department of Treasury. FSC finds creative methods to identify loan funding for small businesses and is often the small business owner’s first foray into formal business financing.

Recently, Medley sat down with Prince George’s Suite Magazine & Media in a Q&A session to discuss her vision, progress, career and goals for the her new role in the county.

Another version of this interview is presented in the summer 2023 edition of Prince George’s Suite Magazine. Click here for the digital version. For the print version, click here

PGS: What has it been like since you’ve started?

Dawn: Officially, on January 1, I started serving in the capacity of president and CEO of FSC First. We had begun initiating many opportunities for the corporation that ultimately would benefit small businesses and we continued to work on those efforts. They have come to preparation with the introduction of a couple of new priorities that will be part of my CEO-ship if you will.

I promised my board of directors in the first 90 days of being CEO that I would deliver an online platform that would enable businesses to receive a response to their loan applications immediately. We had an online application, but you would submit it, then it would take about five days in loan intake review. Before you could start to receive some feedback, it could be as long as weeks, depending on how complicated the request was and the amount of the loan request.

Now, we've built a Fintech platform where a business owner can submit their application and receive an immediate response for approval. Fintech is a financial technology that provides an interactive experience. Typically, you go online and you apply for something, it's one-sided. You're putting your information into the cyber black hole, and you're hoping someone will respond to you favorably, right? What we've heard from our businesses is that they need or want to know something more rapidly, even if it's a first impression because once a lender sees something, they see it. FSC First is a non-bank lender. We do things a little differently: the immediate feedback on what was submitted was something business owners wanted, and so we built it for them. We delivered this new platform, in my first 90 days.

PGS: Was this technology not available in the immediate or recent past?

Dawn: It is something that people may be familiar with in other Fintech companies---like Onboard and BlueVine, Kabbage. What we provided was not just an immediate response to the business owner, but also on our side of the interface, our underwriters can immediately see the technology's disposition of that file.

Then if there’s an issue, we never just decline an application. We advise them that we’re going to review this file very quickly. It's also built-in so their underwriters can actually see pointedly what the issue is with the application. Sometimes it's just a user error, maybe something was entered incorrectly. We're able to see and pinpoint exactly where we need to go in the file in the online application so that we can give immediate guidance to the business owner. As I said, in my first 90 days we got it built, got it tested and implemented it and launched it. It's been very successful thus far. The system is operating as expected.

PGS: What else is on the near horizon for FSC under your leadership?

Dawn: With over $40 million to deploy in available financing right now, what's new on the horizon is a couple of new programs. There’re a few institutions who have approached FSC First because we're a unique CDFI. We're also an SBA-designated CDC. As such, we're able to provide our lending and servicing expertise to other municipalities and other institutions and other organizations.

So, we are expanding those lender service provider services to other organizations and municipalities who may not have the back-office underwriters, portfolio managers and loan origination teams.

We've done so successfully over the past 10 years or so. Ten-plus years in Prince George's County, in Bowie, and in the City of Mt. Rainier. We are also a state fund manager for Maryland’s VLT Fund. So, I guess the word is out. We are approached weekly by other institutions. One of our newest programs, sponsored by the University of Maryland Medical Systems, is [marketed] under our Healthcare Capital Fund where we're providing financing of $50,000 for businesses who are in the healthcare industry, healthcare and wellness industry, or for businesses that support those industries.

We're also working on a new program. It's so new we haven't even named it yet but it's another million that should become available by the end of August. We're going to provide that to businesses who may be underbanked, underrepresented---like we do with many of our programs---but with a focus on uplifting minority-owned businesses so that we're doing what we can to help ensure equal access and equity to financing opportunities.

PGS: When you were positioned to take over at FSC, what are some of the things that you had in mind for several years that you're now in position to make reality?

Dawn: Well, my predecessor [Shelly Gross-Wade] always had a mantra of doing all that we can for small businesses, so we've always had the freedom to share those ideas and get them championed. Under my leadership, some of the things that I really wanted to focus on we've actually implemented already, and it will just get better and bigger. One thing we do as we go about the day-to-day business of lending is to go beyond those we’ve funded. We don't just focus on the applications that get funded.

We focus also on the ones that didn't get funded---because if a business didn't need the money, they wouldn't have applied. But perhaps they weren't prepared to borrow. We don't want to forget about those businesses. We want to get them prepared to borrow. In the past, we’ve not really had a formalized path for them.

**Medley with Prince George’s County Executive Angela Alsobrooks**

We may refer them to a resource partner. But we noticed that it was difficult or challenging for the businesses to assimilate the information they received, apply it to their loan package, and then be able to come back to FSC for financing. In following up with them, and again listening to what the businesses want, we developed a business education and technical assistance program. Now through our Level Up program, businesses can receive the coaching, mentoring, training and education they need to enhance business acumen and achieve business success.

PGS: This sounds like the ABCs of being in business: the crossing Ts and dotting Is.

Dawn: Then we continue with ongoing education for businesses, so businesses can tap in on any particular subject that we're running for that series. The Capital Matters series is coming back around for the Spring, and that's where you get into some of those ABCs and 1, 2, 3s, the numbers of it all, if you will, of being in business.

PGS: How do you see the organization itself growing? Are you adding more people onto your team or are you streamlining?

Dawn: I've noticed, and going back to things I've wanted to do that were on the wishlist, is to expand our staff and resources. We're a hardworking team, very skilled and talented professionals, but we were doing so much with so little. And now it's positioned where we're now hiring. We've brought on a new business development officer and we plan to bring on more so that we can provide our services more readily throughout the state of Maryland.

Prince George's County is home. We're going to make sure that we're not the best-kept secret anymore. It's my determination to break out of that. We need more folks on the street. We can't do that yet as we are hiring those positions now, but we're going to have the multiplier effect of those persons by the online platforms that are able to give immediate response and immediate feedback.

PGS: Will FSC do more with potential entrepreneurs, young people through education programs to help them to understand the tenets of business so that they don't fall into some of the loopholes of being in business that their predecessors did.

Dawn: Absolutely, we're bringing on interns. Young interns join the organization with that in mind, not just teach them the business of business, but also the business of assisting a business as well as what FSC does as an organization. Not only are they getting exposure to what business owners should know and understand, but they're also getting exposure to the lending environment and economic development so that if they decide, “Maybe I don't want to be a business owner, but maybe I want to specialize in avenues to assist business,” they're going to be able to learn that as well. We're doing the hands-on approach and actually bringing the young ones who are interested in this right under our own roof.

PGS: When do you foresee some of these internship pro efforts happening?

Dawn: Right away. We'll be probably featuring them in our newsletter. If it's permitted by the internship program, we'll be featuring them. Some of them are high school, some of them are college age, and some of them are recent college graduates. We are very, very focused on giving this opportunity in economic development, and business financing to new college graduates. One of our recent hires was a graduate of Howard University.

PGS: That brings me more to talking or asking about you and your story. Can you tell us a little bit about yourself?

Dawn: Sure. I've got over 20 years of experience both in public and private financing. In my career, I've developed and implemented, and managed programs and operations in several funding sectors like commercial banking, and economic development, of course, small business financing with a specialty in CDFI, CDCs, and co-ops during my tenure at National Cooperate Bank. I'm a subject matter expert in the FDA's 504 and 7(a) loan guaranteed programs as well as economic development programs that focus on increasing municipalities' tax base, retaining and attracting jobs, and focusing on increasing and supporting key industry sectors as well.

Actually, I have got quite a few years of experience in green banking. That specializes in programs that promote the green and energy efficiency, energy conservation, and renewable energy programs. I started and developed a program first for the state of Maryland when I was at the Maryland Department of Housing and Community Development, and then brought those same assets to the county in helping FSC take on and manage the Fishers County's Green Bank.

Prior to coming to the county, I was the director of Business Finance for Agency with the state of Maryland. Also was on the governor's task force for the Business Board Initiative as well as draft and legislation to provide access to capital for emerging small businesses through a microenterprise program.

I'm also a graduate of the class of 2016 Leadership Maryland program. I serve on the Maryland Economic Development Association or MEDA Board of Directors as well as the Maryland Commercial Lenders Association Board of Directors. I hold a Bachelor's of Science degree in Business Administration with a focus in Business Law and Public Policy from the University of Maryland University College. I was a full-grown adult when I got my degree. I did that while being a mom of three, a wife, and at the time I was vice president here at FSC First.

**Medley (at left) has a moment with Maryland Lt. Gov. Aruna Miller and Dipti Patel, FSC First, Vice President of Business Finance.**

PGS: That’s amazing. You must have an invisible cape with your suit! We're talking about 12-hour days, 15-hour days?

Dawn: Absolutely. I care a lot about what we do and it's hard for me to turn it off. There are 12, 15, 16-hour days and definitely some weekends especially when we're doing outreach to the community, we got to meet them when they're available. Yes, it does go into the weekend, and then when I was in school, it was the late-nighters, there were some all-nighters to get the job done.

PGS: You say you love what you do. Did I hear that correctly?

Dawn: You did.

PGS: Okay. What steered you toward this work to begin with? What was the first point in time that you realized this was for you. When was that and what sparked it?

Dawn: That's a great question. I started down this path when I was with Fannie Mae.

PGS: When was that?

Dawn: Fannie Mae was in the mid-90s. I was by then married with two babies. What's funny is prior to that, I was in the medical field. Worked a very long time in the plastic surgery field. I've talked to a couple of other folks who've been in lending for a long time, one of whom is my VP here at FSC. They also began in the medical field. I saw myself continuing down that path, but I think I passed that gene on to my middle daughter because she's now a PICU nurse (pediatric ICU).

I transitioned to finance which also was of interest to me. Since I had been a business owner as well, I also understood there were needs, real needs. It was always inventory that was an issue and the availability of it for jobs. I see some of those very same things happening in small businesses when they need working capital to support inventory. But going back to your question of what kind of sparked my interest: It was in the mid-90s with Fannie Mae. I was on the multi-family operations side of the house. What interested me most were the site visits.

I actually was on a special project whereby there was an issue with a building that could have left Fannie Mae vulnerable. But I was able to dive into the site visit analysis of it. I was able to provide evidence of what Fannie Mae needed to resolve. It was an issue of an environmental nature that had arisen with a multifamily building.

I continued on that path when financing of multifamily buildings came to my interest. Then that continued with my time because once I left Fannie Mae, I went to Freddie Mac, which is more the same.

I was in their quality control area. Again, I was deep diving and investigating into the properties themselves as well as making sure that the finance was sound--this is where the financing part came in. I was working with what they call dust lenders or delegated lenders who had done the financing and reviewing their packages to make sure that they were done according to Freddie Mac's liking as the underlying investor. Little did I know that that would be my first exposure to government-guaranteed loans. Now I'm on the commercial and business side of the same transaction.

PGS: Do you ever have to let a client know that what they're doing is 100% not working and there's nothing that you can do? Does that ever happen?

Dawn: I would say that situation occurs. We keep our portfolio borrowers very close to us. We look at their financials, we look at their tax returns, and we can sense before they're willing to say that something is awry. Why is revenue sliding? Why are costs increasing? We try to step in early and help them adjust to what's happening.

Sometimes we can modify a loan to give them a little more breathing room so that the business continues the cash flow. Other times we have to advise them: “You need to change your business model,” and the reasons why because sometimes we're just too close to it. We can give them that objective view, that based on the numbers, the numbers don't lie. We can see that this has been the trajectory over the last three quarters. This doesn't end with a fourth-quarter loss.

Then we get feedback from them because they're going to tell us, "Well, this is the reason this cost went up, or that cost went up, or maybe I had to hire people. Maybe it was a temporary situation. Maybe a very large expensive piece of equipment just went down." Those are things we can fix. Maybe it's, like I said, we modify the loan or maybe it's actually enhance the loan and add more dollars to the situation to cover that extraordinary, unexpected expense that's messing with cash flow.

We can assist them with those things. We build that rapport with the bar early on so that it can feel free to let us know what's happening before it happens. We're also monitoring their numbers so that sometimes we see it before they do or we see it and bring it to their attention and say, "Look, this is the time to do something about it. We can't let this go on any longer. Here are all the reasons why you shouldn't."

If FSC has to say no to a loan request, there is absolutely nothing that can be done. Usually, it's because it was too early. It's usually because their business is really not a business, it's more of a concept. It's an idea. People say, "Well, isn't that a startup?" It's not. Not quite yet. There's more that goes into building out a concept and an idea before it is a business. Usually, when we have to say no, it's because it hasn't been built out yet. They haven't put that idea and concept in writing.

People sometimes don't understand how important a business plan is because it's going to map out not just the idea or the concept. It's going to map out how you're going to market it. It's going to map out what is going on in the industry related to that service or craft. It's going to map out the financials of that business or craft. Into those financials, there's going to be the assumptions or how did you get there? How did you get to those numbers? Is that supported by what is actually happening in the industry?

If it is that work that's got to happen, then you become a startup. Then have you done it operationally? Have you done all the operational and organizational setup for that business? Now you're getting out of the concept and idea area and you're into, "Okay, I'm ready to be a startup business now. Now I need to find financing."

PGS: With regard to next year and the things that you are expecting to achieve, are you expecting that you will maintain your output levels in terms of support for local businesses or are you expecting them to increase?

Dawn: We're expecting to increase exponentially. Some of the projects are lengthy, they're construction projects and so it just takes time. You can't do it all at once. You have to do a construction loan a little bit at a time as it gets built but at a minimum to have it committed is the goal for calendar year 2023. FY24 began July 1. Based on ending FY23 with nearly $6 million in loan approvals, we anticipate deploying another $6 million by calendar year-end 2023 and $5-$7 million by the end of FY24.

PGS: How does the state and national economy affect what FSC does?

Dawn: For instance, the rate environment, the big topic. We talk about it often because some of our loan products have variable rates and it is based on the Wall Street prime. What we've done at FSC is, because the rate environment seems to continue to increase, we put a ceiling on our rates so that as the Wall Street prime rate continues to go up, the borrower's rate will not. It will be capped.

We're doing things like blending rates. I could probably teach a whole webinar on that but you blend it with something that's fixed, is one way to do it. Then there's some programs where we have the flexibility just to cap it. Period. The goal is to help businesses. We are non-profit and sometimes that's exactly what that means, non-profit [she laughs]. Our mission is to be that solution for business financing.

PGS: Is there anything that we didn't ask you about but that you would like to include in our audience's understanding of who you are and who FSC is? Anything at all?

Dawn: As I said, we continue to get programs and opportunities to give them to small businesses almost a couple of times a month at least, and currently, there's over 13 programs, and so when you go to our website, you see that. I want business owners to know, don't worry about what program it is, just apply. I'll encourage small businesses to sign up for the Level Up Program and get that education before you need the funding. If you are in a position where you need the funding now, don't hesitate to apply. We'll guide you through the process.

PGS: Thank you very much.

Dawn: You're welcome.