August 7, 2013
When it comes to Small Business Administration loans, there’s Huntington Bancshares and then everyone else in Ohio.
Huntington made 60 percent of all SBA-backed loans in Ohio between Oct. 1 and June 30, according to data provided by the SBA offices in Columbus and Cleveland.
Huntington, long the state’s top SBA lender, made 1,240 of the 2,061 loans made by banks for the period.
U.S. Bank and JPMorgan Chase & Co. came in second and third, but both were well behind Huntington. U.S. Bank made 117 loans and Chase, 106. All together, the 100 or so banks that have participated so far this year collectively can’t match the number of loans Huntington has made.
“Our future is tied to the economies where we live and work,” said Steve Steinour, the bank’s chairman, president and CEO. The bank’s small-lending push that has made it the No. 3 SBA lender in the country despite the fact that it operates only in the Midwest.
Huntington’s commitment to small-business lending took a leap in 2010 when the bank announced that it would loan $4 billion over three years to small businesses. The announcement came as credit for many banking customers was difficult to come by after the brutal recession.
“Huntington has gotten the direction that this is an important market,” said Gil Goldberg, director of SBA’s Cleveland office.
Goldberg’s counterpart in Columbus, Martin Golden, agreed.
“We think they are very committed. We like that,” he said.
Goldberg said in the Cleveland district, smaller loans in the range of $100,000 by Huntington are especially strong compared with other banks.
Traditionally, there has been a need for loans that size, he said.
“That’s where the market is and that’s where the market always has been,” Goldberg said.
James Thurston, a spokesman for the Ohio Bankers League, credited Huntington with doing a good job with the SBA market.
“Huntington made a decision that that was an area they were going after,” he said. “They developed an in-house expertise that is almost unique in the country.”
Why other banks don’t do more SBA lending isn’t clear, he said.
“There is a perception out that among community banks, that SBA programs involved a lot of paperwork and are more complex,” he said. He credited the SBA with trying to streamline some of its programs to make them easier for banks to participate in.
Under SBA loans, the federal government provides a guarantee to repay the bulk of the loan should the borrower default. Borrowers may have good credit but often can’t get conventional loans from banks because of an assortment of reasons, ranging from the collateral used for the loan to cash flow.
In other cases, the borrower may qualify for a conventional loan, but an SBA loan provides additional benefits that, for example, might give the business more time to pay back the loan.
“We are able to use the program strategically. It’s just become part of our credit culture,” said Craig Street, Huntington’s SBA lending director.
The perception is that SBA borrowers are less creditworthy, but that isn’t the case, Street said.
“These are great companies, but they just kind of miss on a metric or two,” he said.