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Economic Development in Rural Wisconsin Small Business and Farm Access to Credit

Economic Development in Rural Wisconsin Small Business and Farm Access to Credit. Wisconsin Business Development Finance Corp. A Certified Development Company www.wbd.org. Wisconsin Business Development Finance Corporation.

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Economic Development in Rural Wisconsin Small Business and Farm Access to Credit

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  1. Economic Development in Rural WisconsinSmall Business and Farm Access to Credit Wisconsin Business Development Finance Corp. A Certified Development Company www.wbd.org

  2. Wisconsin Business Development Finance Corporation • Authorized by the Small Business Administration as a Certified Development Company, which allows us to originate and service SBA 504 loans. • Fixed Asset Financing (i.e. Buildings and Equipment) • Long Term Fixed Interest Rate (10 and 20 years) • Subordinated Debt to the Lead Lender • Provide Loan Packaging Services to Wisconsin Lenders • SBA 7(a) • USDA – Rural Development – Business & Industry Loan Guarantees • WHEDA Loan Guarantees • Revolving Loan Funds

  3. WBD Offices • Lending Offices • Madison • Waukesha • Racine • Oshkosh • Green Bay • Stevens Point • Eau Claire • Hudson

  4. Wisconsin Business Development Finance Corporation • 30 years of working with our lending partners to benefit Wisconsin businesses • Funding $2 Billion plus in community development projects in Wisconsin • For over 2,000 Businesses • Contributing to 64,000 jobs statewide • Originating 504 projects in 70 of Wisconsin’s 72 counties

  5. WBD Performance In Rural WI

  6. WBD Performance In Rural WI • In 30 Yrs - 2043 Loans Funded • 575 in OMB defined Rural Counties • 30 Yr Average 28.1% Rural • 5 Yr Average 26.5% Rural • Lagging Indicator • Since Recovery began Rural Loans have been at or below 5 Yr Average

  7. WBD SBA 504 Portfolio Trend

  8. Comments on Portfolio Trend • Combined Rural & Metro Portfolio • Stimulus Package in 2009 & 2010 was a benefit • Volume was Up in a Down Economy • Fewer Start-up Businesses • More Purchase of Existing Facilities Less New Construction • Impact on Rural Business Activity

  9. Industry Segments • Strongest Industry Segments • Manufacturing • Professional • Other Service • Food portion of Accommodation & Food • Weakest Industry Segments • Retail Trade • Home Care & Social Assistance • Art, Entertainment & Recreation • Agriculture – Dairy – Low milk prices

  10. Average Credit Score on Approved 504 Loans

  11. Comments on Credit Scores • For 504, Lenders are the Gatekeeper - Bring the Projects to WBD • More Lenders Looking for Credit Enhancements • Lenders Only Bringing Stronger, Well Established Businesses – don’t see Weaker Projects

  12. SBA 7(a) Lending • WBD Assists Community Based Lenders with Loan Packaging • More Lenders Looking Ways to Deal with Pressure from Examiners, Often Seeing • Weaker Projects that need shoring up • Debt Restructuring to improve cash flow • Not Seeing • Start-up Businesses • Innovative Businesses

  13. Life After the Stimulus Package • Steady but Lower Volume • Lenders Keeping Stronger Projects • Looking to for Credit Enhancements on Middle of Road Projects • Void in the System for Start-ups and Innovative Projects • New SBA 504 Refinance Rules will help Business Cash Flow • Restructure Debt • Cash Out Equity in Fixed Assets

  14. Thank You! Rich Diemer V.P. & Economic Development Officer

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