Small-business loans in decline in Athens and throughout state

With a new study showing a drastic decline in small-business loans both in Athens County and throughout Ohio, area companies are said to be holding tight and hunkering down to get through the difficult economy.

Lt. Gov. Lee Fisher, D-Cleveland, who also heads the state’s Department of Development, released figures last week that show loans to Athens businesses from the U.S. Small Business Association declined by 62 percent between 2008 and 2009.

Fisher is running for retiring U.S. Sen. George Voinovich’s seat. He faces Secretary of State Jennifer Brunner in the Democratic primary, while former U.S. Rep. Rob Portman is running on the Republican side. Voinovich is a Republican.

The figures from Fisher show that the amount of SBA loans to Athens businesses dropped from $1,104,730 in 2008 to $415,000 in 2009. This is a decrease of $689,730.

These declines mirror the situation throughout Ohio, with the total amount of loans to businesses across the state dropping 34 percent from $56 million in 2006 to $30 million last year, according to Fisher. In 2006, Ohio’s 204,000 small businesses employed nearly 49 percent of its private workforce.

Fisher criticized Wall Street for the crunch on small-business loans.

“Wall Street is giving Ohio businesses the back of its hand, not the support they need to create jobs,” he said. “It’s time we hold Wall Street accountable and get back to creating good-paying jobs on Main Street.”

Wendy Jakmas, president of the Athens Area Chamber of Commerce, said that in this economy, jobs aren’t expanding.

“Businesses are sitting tight, I think,” she said. “Businesses are trying to figure out where this economy is going, trying to see a light at the end of the tunnel and hoping it’s not a Mack truck coming at you.”

She said that she was distressed by Fisher’s figures but felt some relief when she saw that the situation is statewide.

“It seems like everyone’s sitting tight and hoping the other shoe’s not going to drop,” she said.

Jakmas said that regarding the current business climate in Athens, winter is always rough on some businesses, but some others do well.

“I think our businesses are holding their own,” she said. “A lot of businesses last year pared down, and a lot of businesses are wearing more hats.”

She said she has not heard complaints from small-business owners that they cannot get loans.

Todd Shelton, director of the Athens County Economic Development Council (EDC), agreed that many businesses are holding steady during the country’s economic turmoil.

He said the council has been having “lunch-and-learn” workshops for local entrepreneurs to help them understand what’s available from the SBA and other organizations that provide grants and funding to small businesses.

“There are certain programs through the SBA, or through the state, or through the federal government that a lot of small companies here may not qualify for because there’s a job requirement or maybe they don’t have the resources to apply for it,” he said. “I’m not saying there’s one certain thing. There’s a combination of things.”

He said that while five years ago small businesses may have been in a position to expand, at this point they are not in that mode.

“They’re just trying to keep what they’ve got,” he said. “And hopefully as the recession and the economy starts to improve, we’ll be able to talk to companies and help them gear up and go into the next phase.”

Shelton said that the SBA does a good job of letting business owners know what’s available, and that local officials do a good job of communicating that as well.

As far as advice for business owners, Shelton said that contacting the local bank is always a good idea.

“A lot of our local banks here in Athens County do work with the state or the SBA on some of these grant programs and some of these loan programs,” he said. “If people don’t know this, I would encourage them to go ahead and do that.”

Athens Mayor Paul Wiehl said that the ramp-up of economic recovery will be difficult nationwide. He did cite the effort among the county, the city and Ohio University to coordinate economic development with such organizations as the EDC.

In his release about the study, Fisher proposed his own plan for economic development.

The Fisher plan includes “creating 5 million jobs nationwide over two years with a new job creation tax credit”; encouraging banks “to get loans out the door to responsible small business owners and cut red tape holding back local entrepreneurs”; and boosting transparency and accountability on Wall Street.