PETOSKEY -- Since the economic downturn, businesses across the country have cut expenses, trimmed down spending, and in some cases, have had to eliminate staff.
But despite the national trend to cut back through the past few years, several banks operating in Northern Michigan are now reporting a growing trend in businesses acquiring loans for expansions.
"During all of 2010 and much of 2011, approximately 75 percent of SBA loans we made went for the purpose of refinancing existing business debt that was previously held at other banks," Dyksterhouse said. "However, now we are seeing the ratios reverse to where approximately 75 percent of our loans are now for business growth and only 25 percent are being used for refinancing."
Dyksterhouse said he is seeing more requests from businesses in Northern Michigan for such things as new equipment purchases, building construction and business acquisitions.
Kilwins Quality Confections is a business that obtained financing from The Bank of Northern Michigan for expansion in recent years. Don McCarty, president of Kilwins, said the expansion from its Division Road plant in Bear Creek Township to its new spacious quarters at 1050 Bay View Road in Petoskey, was needed to accommodate the growth trend on the retail side.
"The expansion has exceeded expected goals, and it feels great to have a company with increasing sales and satisfied customers," McCarty said. "We needed to expand to meet the demand for our products."
Kathryn S. Erber, senior vice president and Petoskey market manager of The Bank of Northern Michigan, said she thinks that there were numerous businesses on the sidelines during the economic downturn and were patiently waiting on the sidelines for their turn.
"The expansions are allowing companies to provide more employment opportunities. But some business owners are still nervous because the economy is not where it once was," Erber admitted.
Gregg Garver, community president of First Community Bank in Harbor Springs, agrees that people are still hesitant to expand, but many have become accustomed to the "new normal."
"It's actually a really good time to expand," he said, "because you can get into a new location much cheaper than you could five years ago and the interest rates are considerably low."
Garver noted that his First Community Bank location is currently ahead in lending this year for the first time in many years. He said that he projects the bank's lending to increase and continue to grow as more businesses seek loans to expand their operations.
Decka Digital, a new printing company located in Harbor Springs, has benefited from the loans provided by First Community Bank. The new business is currently in its soft opening phase, but has been using the loans to purchase new equipment and expand its operations before its grand opening in September.
"We are still under construction, but we are open and serving customers," said Cathy Kalahar, co-owner of Decka Digital. "First Community Bank has been instrumental in helping us throughout this whole process."
Huntington Bank has also seen a significant increase in businesses taking a chance on expansion projects that not only benefit Northern Michigan, but the entire state.
"There is a lot of expansion activity going on within the entire state of Michigan and we are tremendously happy to be a catalyst for helping grow businesses and improving our state economy," said John Erwin, corporate regional executive of Huntington Bank.