Despite the government's best efforts to remedy the current economic crisis, most experts agree that small businesses are going to feel the credit pinch in the months ahead.
Banks are looking harder at business plans and past experience of start-up applicants, as well as thinking twice about extending lines of credit to existing businesses.
"We're still actively pursuing lending opportunities, but taking maybe a little bit harder look at start-up businesses - really evaluating their business plans, their prior experience, their marketing abilities and projections," said John Hanlon, assistant vice president of commercial lending with Community Bank in Bradenton. "It's slowed down a little bit on both applications and approvals, but we're still trying to give everybody a good review and a chance to state their case."
Sally Armendarez, vice president of business banking for First Bank in Bradenton, said her bank also has strengthened its credit standards in reviewing business loans.
Though there hasn't been overwhelming consumer interest in business loans lately, Armendarez is still receiving applications.
"Some days I receive numerous inquiries, along with referrals from our retail branch partners," Armendarez said. "Then other days the phone is occasionally quiet. I would estimate 25 percent of the calls are for start-ups."
Among those First Bank has recently helped with start-up or expansion loans were physicians, sign contractors, child care and development providers and a printing company, Armendarez said.
Ralph Ross, deputy district director of the Small Business Administration's North Florida district, said small business loans have been on the decrease.
"We have enjoyed about a 10- to 20-percent annual growth in our loan programs for the last several years and this is the first time in 10 years that we've actually gone down about 10 percent," Ross said. "We saw this coming about a year ago. I was out talking to bankers about a year ago and they were saying, 'We're looking at as many deals, but they look weaker.'"
Most of that weakness has come from the sharp drop in real estate values, Ross said, because real estate is often used to secure business loans.
Many banks still have ready amounts of cash, but are gun-shy about deploying it, Ross said.
"I'd say a good deal (of applications) need to be shopped around a little more till it gets to the right banker," Ross said. "But there are banks out there who are still looking to do commercial loans. Some of our banks individually are having liquidity issues, but there are a lot of others that are doing just fine."
Ron Pickelsimer, president of Manatee Printers, had no problem getting a loan from First Bank recently for a new $1.6 million printing press.
"They put together a two-part loan - they funded half of it and the SBA funded half of it," Pickelsimer said. "I was very pleased. They actually gave me a commitment within about four days. They didn't jockey me around."
It probably didn't hurt, however, that Pickelsimer's company has been in business for more than 30 years and is anticipating $3 million in revenues next year.
"There's no doubt that banks are being more careful. Their underwriting criteria is probably elevated," said Tramm Hudson, a local banking consultant. "But I think people with good credit and people who've had banking relationships over a long period of time are probably accessing their credit."
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