By Sharon Hanks Huntington Bank's
announcement last week to allot $750 million for new loans over three years to cash-starved small businesses in West Michigan has drawn "extraordinary interest," says Jim Dunlap, Huntington's regional president of West Michigan based in Grand Rapids and its senior executive vice president of commercial banking overseeing the Michigan market.
"There's an enthusiastic willingness to participate. We're very excited with this initial test," says Dunlap in describing the bank's efforts to revise its underwriting requirements to make it easier for small businesses to access capital. "We're trying to be more innovative and flexible . . . and maybe more realistic."
It's no wonder cheers of relief surrounded the announcement. Small businesses traditionally have been the engine for economic recovery and job growth, but during this Great Recession, their recovery has widely been stymied by more rigorous lending practices and tighter credit.
To push through the $750 million in loans as soon as possible, Dunlap says the bank is quickly bringing on board six new small business bankers in West Michigan. This will double its lending staff to process double the amount of money the Columbus-based bank would historically loan to West Michigan small businesses during three years. The majority of the loans are expected to be made this year.
Though Huntington is the nation's 24th largest bank, its lending volume to small businesses ranked it as the nation's 7th largest lender in 2009. In Michigan, it ranked number one in Small Business Administration loans both in amount and volume last fiscal year.
The bank's announcement is part of a sweeping push to offer $4 billion in small business loans in the Midwest over three years, an amount that could translate to an estimated 27,000 loans.
Dunlap says the commitment follows a troubled year when businesses struggled with the recession and made "significant changes" to accommodate the dynamic economy. "I think we'll all agree that 2009 was an unusual year," the bank executive says.
Now, instead of looking primarily at historic payment patterns while deciding to underwrite a loan, Dunlap says bank lenders will look more closely at a company's current performance and its business plan. "That's a really big change," he says.
He says loans to small businesses -- defined as one with annual sales of $15 million or less -- typically ranges from $150,000 to $1.5 million, depending on a company's business plan. The money will be used for working capital, expansion, new equipment and additional staff.
Sources: Jim Dunlap, Huntington Bank's president of West Michigan operations and senior executive vice president of commercial banking overseeing Michigan. Sharon Hanks is innovations and jobs news editor at Rapid Growth Media. Please send story ideas and comments for the column to Sharon at [email protected] She also is owner of The Write Words in Grand Rapids.
Jim Dunlap, Huntington's regional president