Jorge Martinez spent eight months jumping from bank to bank, trying to find financing for his Hialeah, Fla.-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.
For Martinez, like scores of other small businesses, 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.
Miami-based 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 TotalBank, a subsidiary of Grupo Banco Popular in Spain.
TotalBank has committed $500 million to lend to small businesses this year, overall.
Lenders such as BankUnited and TotalBank want to see in borrowers a business in operation for two years, so that they can review two years of financial data. A business plan, cash flow projections and a clear sense of what the funds will be used for are also important, said several bankers.
For Bank of America, the most important factor is cash flow, said Fabiola Brumley, an executive for Bank of America's southeast region.
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