11/25/2008
Coming off its best year ever, a Lansing coordinator of U.S. Small Business Administration lending is extending its footprint into Grand Rapids and Ann Arbor.
The Michigan Certified Development Corp. -- one of seven organizations in the state involved in the SBA's 504 lending program --Â hired a loan officer in Grand Rapids after the recent departure of a staff member in Kalamazoo. The new loan officer, Kelly Hutchings, will work a broad region, including the Kalamazoo area and southwestern Michigan.
A new loan officer in Ann Arbor will work the western Metro Detroit area, complementing an existing office in St. Clair in Macomb County.
The expansion of the MCDC, which also has an office in Cadillac, comes during tough economic times and with tight credit conditions that have more businesses and banks turning to SBA-backed loans to complete transactions.
"If there's any time this program is needed, this clearly is it," MCDC President Jane Sherzer said. "We do believe there is plenty of opportunity for this lend-ing program throughout the state of Michigan."
The SBA approved 225 loans totaling $107.2 million under the 504 program in Michigan during the 2008 fiscal year. That compares to 211 loans in FY 2007 for $116.0 million.
Of the total, 97 loans totaling $45.9 million originated with the not-for-profit MCDC, which easily led the state for the fourth year in a row, followed by SEM Capital Resource, which has offices in Grand Rapids and Detroit, the Oakland County Business Finance Corp., the Economic Development Foundation in Grand Rapids and Holland-based Lakeshore 504.
"Despite the tough economy and the bad banking news, we are going strong," Sherzer said.
Working through certified development corporations, the SBA's 504 program provides loans for up to 20 years at below-market rates to finance capital projects. Borrowers must provide 10 percent of their capital needs. Forty percent is financed through the SBA and the final 50 percent comes from a bank loan.
Sherzer said a growing number of banks are using 504 to mitigate their lending risk.
Where 60 percent to 70 percent of loans were once deemed marginal and required SBA backing, 80 to 85 percent of what the MCDC handles now needs "more credit enhancement," she said.
"They need to make it a little better for the bank to do the deal," Sherzer said.
Source: http://www.mlive.com/businessreview/oakland/index.ssf