SBA Lauds Local Lending Institutions

A local financial institution is among the winners of the U.S. Small Business Administration lenders awards for fiscal 2016. The SBA District Director’s Award was given to Northern Initiatives, a nonprofit Community Development Finance Institution that provides loans to small business owners and entrepreneurs in northern Michigan.

“In February of 2016, we reached a major milestone – $50 million in loans to small businesses,” said commercial lender Chris Wendel.

The organization was chosen for exceptional support of SBA programs in the Michigan District. “We serve a lot of counties, from the UP to Mount Pleasant,” Wendel noted.

He said Northern Initiatives is an alternative source of funding and is not really competing with banks. The funding sources he draws from allow for lending that banks and other similar lending institutions cannot do.

“We do a lot of loan guarantees from the Small Business Association,” he said. “If the SBA guarantees 75 to 80 percent of the loan, we’re able to help a lot more people.”

The award was among those announced by the Michigan District Office of the U.S. SBA. Its fiscal 2016 lender awards are given each year in recognition of overall support of the SBA loan guaranty programs. In addition to Northern Initiatives, several statewide banks with offices in Traverse City were named winners, including Huntington National Bank, which was named Michigan Lender of the Year for the best overall performance.

Since 1992, Northern Initiatives has provided financial assistance to hundreds of small businesses, many of them startups. The businesses run the gamut, from retail, restaurants, breweries and vineyards to light manufacturing, salons and spas. Other sectors include tourism, professional services, and value-added food producers – primarily in underserved communities. Northern Initiatives has made over 860 loans to entrepreneurs and small business owners that might not qualify for financing from traditional banks for a variety of reasons.

Northern Initiatives is the most active SBA Community Advantage lender in the state, having approved 11 Community Advantage loans for $1.7 million. Northern Initiatives also provides microloans, in part funded by the SBA and approved 33 loans for $833,649 in fiscal 2016.

Wendel cited as examples restaurants ranging from the Newaygo Brewing Co. to a small diner in Rosebush to Gaijin in Traverse City, all of which have benefited from Northern Initiatives’ ability to secure loans for them.

“Restaurants have a high failure rate,” he said. “The diner in Rosebush had no other funding, but we knew it could work.

“It’s similar to (owner) Simon Joseph and Gaijin. We started with a food truck (when Joseph opened his Harvest truck, which has since grown into a sit-down restaurant as well). He’s grown with us, and we’ve grown with him. That’s a good relationship.”

Huntington National Bank was named Michigan Lender of the Year for the best overall performance. Consideration was given to volume, increases in dollar amount, area coverage, and participation in SBA programs and community activities. Huntington originated loans totaling nearly $164 million in fiscal 2016. This is the eighth year in a row Huntington Bank has won this award.

“Our lending partners play a critical role in helping small businesses get the financing they need to start and grow their businesses,” said Constance Logan, SBA Michigan District director. “We are pleased to recognize their commitment to growing Michigan’s economy.”

Chase Bank was named the 504 Third Party Lender of the Year. This award is given in recognition of the best overall support of SBA’s 504 loan program. Chase originated 23 loans totaling $9.5 million. Chase Bank was also selected as the Diversity Lender of the Year for the best overall performance in supporting new market businesses, including minorities, women, and veterans. Chase was selected for its percentage of SBA loans that went to new markets and its support for the full diversity of the population in fiscal 2016.