Jorge Martinez spent eight months jumping from bank to bank, trying to find financing for his Hialeah-based small business, E & M Equipment Corp. The installer of underground utilities kept getting turned down in its quest for funds to cover a payment gap on large county contracts.
Finally, Martinez secured a $250,000 line of credit from Continental National Bank of Miami, through the Community Small Business Enterprise program, guaranteed by Miami-Dade County. That helped the company complete a $1.2 million drainage project on the Marlins Stadium, despite a 45 to 90 day lag in payment on the work.
"With that amount of money, it is very difficult for a small company to front the work for a couple of months without getting money in," said Martinez, vice president of E & M Equipment, which he founded five years ago with business partner and president Edrey Rodriguez. "So that line of credit is really helpful to let us do the job. Otherwise, we would have been very stretched to finish that job."
For Martinez, like scores of other small businesses in South Florida, getting necessary financing has been a difficult challenge, as the economy slumped, banks shied away from lending, and loan demand waned in a sort of recessionary Catch 22.
Now, the door to small business financing is finally opening, at least a crack, as more businesses are getting bank loans that are guaranteed by the U.S. Small Business Administration or through other programs. Some banks are even granting more conventional loans to small businesses.
"I see a little bit of flickering of a light, way out at the end of a very long tunnel," said Marie Gill, president and CEO of M. Gill & Associates, a Miami-based management, public relations and economic development consulting firm. "But I do see a flicker, which is better than total darkness."
Gill's company operates the Minority Business Enterprise Center -- funded by the Minority Business Development Agency of the U.S. Dept. of Commerce -- which helped Martinez get his line of credit. The company provides services to small businesses, such as helping them develop business plans and package loan applications.
TIDE IS TURNING
The U.S. Small Business Administration, which guarantees loans to small businesses, has, in fact, witnessed the tide turning in South Florida.
In fiscal 2010, ending Sept. 30, lenders made 332 SBA-guaranteed loans in Miami-Dade, totaling nearly $112 million, up 23 percent from fiscal 2009, said Althea Harris, a spokeswoman for the SBA in South Florida. In Broward in fiscal 2010, lenders made 238 loans, totaling $79.8 million -- up 40 percent from the previous fiscal year. And in Monroe: 22 loans were made, totaling $7 million last fiscal year, compared to just three loans the year before, totaling $608,000. Figures for the past four months for all three counties are promising, as well.
"It has certainly improved, and the incentives that were included in the Recovery Act and the Small Business Jobs Act have created a flurry of activity in lending," Harris said.
TotalBank, which ranks as one of the top SBA lenders in South Florida, made 51 SBA loans totaling $16.2 million last year, and hopes to double that number this year, said Omar Ojeda, senior vice president and head of the Small Business Department at Miami-based TotalBank, a subsidiary of Grupo Banco Popular in Spain.
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