By Tracy Will
MADISON — Thanks to a balanced local economy in the Dane County region, “the glass is half full” during these tough economic times, a top banking official said Tuesday.
“I do not want to be too pessimistic. These challenges can be worked through,” M&I Bank’s regional lending director, John Ronzia, told a city of Madison small business conference. “Most of the problems have been national. The Madison market is relatively strong. The banks in and around Dane County are going to survive. Take some comfort in this.
“There are some bright spots, there are some businesses that do better in these recessionary times. Car repair, home repair and other businesses do well in recessions. We’ve seen the first increase in housing starts in 18 months in Dane County, and [housing] inventory levels are down,” Ronzia said. Based on anecdotal evidence, he said he was “optimistic that money is freeing up.”
Dana Hoffmann of Summit Credit Union said “the procedures [for lending] have stayed the same, but the markets have changed.” She said small businesses seeking capital need to work with banks on the “five Cs”: cash flow, personal capital, collateral, conditions on loans, and “good character.”
These determine a borrower’s ability to secure loans, Hoffmann said. “Companies with weak cash flows, like independent restaurants, and those with weak collateral, like homebuilders, may face difficulty securing loans in the Dane County region,” she said.
Diane Pasley of Wisconsin Business Development Finance, which assists businesses seeking federal Small Business Administration Loans, said while there are tough standards for borrowers to meet, many of the local banks are able to provide capital to small businesses.
“We want to see a comprehensive business plan, with good assumptions. We need an independent feasibility study. … Underwriting standards are tightening a little bit, but then again they should have been,” Pasley said.
“The fees for Small Business Administration loans have been waived, making loans less expensive for lenders,” said U.S. SBA economic development specialist John Mirenda, though the stimulus money underwriting the loans may not last past September.