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Growth in SBA loans nabs Omaha's Enterprise Bank honor as Nebraska's top small lender
Providing a bridge between Omaha-area Nebraska entrepreneurs and the access to capital they need to make their dreams a reality, Enterprise Bank has been honored by the SBA as the Cornhusker State’s Small Lender of the Year for 2013.
The SBA recognizes one locally-owned and operated lender which dedicates its commercial lending operations to develop new business and through visionary leadership building relationships with its clients beyond its immediate financial needs.
The bank is proud of its impressive efforts providing the right community-level financing to small businesses, keeping and creating jobs, especially with veteran-owned small businesses. Thanks to an expanded use of SBA Express loan programs since 2010, Enterprise Bank has funded 25 loans for $9.8 million to small businesses through the 7(a) guarantee and 504 programs. The Express program in particular has been an efficient and effective way for Enterprise Bank to accommodate loan requests from small businesses needing quick responses.
In Fiscal Year 2012 alone, Enterprise Bank made nine SBA 7(a) guarantee loans for more than $4 million to firms seeking to refinance existing debt; help build new business; and helped boost the confidence of existing small business in economically underserved markets to expand operations and create new jobs.
Enterprise Bank, from its two locations in the West Omaha area, has enjoyed steady year-to-year growth in the number of SBA loans and the loan volume in its portfolio. The lender made a significant effort to expand its access to capital for small business three years ago, bringing aboard Katey Lenczowski, an expert in SBA lending with previous experience with Lincoln-based Nebraska Economic Development Corp. (NEDCO), named in 2010 as the nation’s top 504 Community Development Corporation. In that first year, the bank’s SBA loans grew from $700,000 to $3.9 million; by 2012, the bank booked and additional $5.2 million in SBA loans with another $4.8 million approved and in the process of funding, a remarkable achievement for a lender of its size.
Expanding access to capital to Omaha's underserved markets
Enterprise Bank also has developed a partnership with Davis Companies, other community lenders and private donors, known as the Eastern Omaha Collateral Guarantee Fund, to provide $500,000 for a five-year pool of short-term microloan funding to minority-owned contracting firms in an unfortunate region of the city plagued by consistent unemployment and only sporadic economic development, so these small firms, who do not qualify for conventional commercial loans, may successfully bid for contracts and perform the work. The owners of Davis Companies, Dick and Sharon Davis, understand business can be one of the most important tools for turning around a community. It's the way they have been looking at poverty and economic development in north Omaha for years, both as a backer of entrepreneurs through his own business and as a member of a long list of community organizations. They’ve helped several small-business owners—a barber, a radio DJ and a transportation company operator, among them—to launch their own ventures, along with helping to create scholarship and mentoring programs. The firm also has worked with Omaha, along with other cities around the country, on plans and rules related to minority contractors and small and emerging businesses.
In 2010, thanks to access to capital through the SBA, NEDCO and Enterprise Bank, the company relocated to a new million-dollar building across the street from Omaha’s TD Ameritrade Park, and the new home of the NCAA College World Series.
As a result of their outreach to improve the community and their own entrepreneurial success story, Lenczowski nominated Davis Companies for the SBA’s Minority Small Business Champion award, an honor the business subsequently went on to claim nationwide.
Helping small businesses grow and succeed key to nomination
Another example of the lender’s efforts to aid entrepreneurs: In 2011, John Carroll and Steven Watson decided to start their new law practice specializing in medical malpractice. As Carroll was an Air Force Veteran, Lenczowski knew the Patriot Express program would serve to provide the firm with a loan for $20,000 for computer equipment and a $330,000 line of credit. After 18 months, thanks to the start Enterprise Bank helped to provide, Carroll and Watson have won settlements large enough to retire their debt.
Then, in August of 2012, Enterprise turned to the 7(a) program to help William and Colleen Barstow, the owners of Main Street & Aksarben Cinema, who sought to bring their independently owned Nebraska-based chain of theaters to rapidly redeveloping Aksarben Village. While the new theater could serve as an anchor to draw in more development and residential activity, Aksarben Cinema found its access to capital blocked by a lack of collateral and a need for a high loan amount for a specific-use facility. The theater group initially financed the leasehold improvements and equipment through a mix of private investors, equipment leases and a small amount of bank financing. After their first 18 months of successful operations, the developer reached out to Enterprise Bank, and asked if the Aksarben theaters would qualify for SBA financing. As a result of the debt restructure using the SBA 7(a) guarantee program, the theater was able to save over $225,000 in annual debt service payments. The theater is consistently ranks in the top two for ticket sales in the Omaha Metro Area, competing against national theater chains.
Then there’s Aspen Athletics of Nebraska, and Tony Dahmen, who began working in the fitness industry at 19 in his hometown of Seattle. By 2000 he was ready to start his own business and purchased an old tennis club in Iowa for $400,000. After growing the business to locations in Oklahoma, he sold that venture, and teamed with another investor in fitness clubs in Texas. Nine years later, he tackled the Nebraska market with Aspen Athletics, a member-focused health club also in Aksarben Village. Two months after he opened, he had 500 members; he moved the club to a $300 million development in that neighborhood a year later. Further growth soon reached a ceiling. The small business’ cash flow barely allowed the company to meet its current obligations; for example, their loan and lease financing rates ranged from 6-1/2 to 18 percent. Getting a loan to bring down those payments was crucial, but the collateral, much of which was tied up in exercise equipment with diminished resale value, meant it would be impossible to obtain traditional bank financing.
“A perfect fit for the SBA,” Lenczowski explained. The improved cash flow relieved financial pressure on the business, and as a result of the refinancing project, will permit the small business to continue to expand and as a result provide more jobs in the Omaha community.”
Beyond service to its small business clients is Enterprise Bank’s service to the community. Among a large number of philanthropic efforts is working with Aksarben Cinema promoting “Together, Inc.”, a non-profit homeless prevention agency to its neighbors in the area. In exchange for a small donation or a can of non-perishable food, families can enjoy a free movie. Their officers also serve as board members of CREW Omaha, Angels Among Us, Midlands Mentoring Partnership, and Midlands Latino Development Corporation.