Huntington creates 1 billion partnership; boosts loans
Huntington Bank called the three-year deal it made a few weeks ago with the state of Ohio “groundbreaking,” meaning it’s possibly the first public-private agreement of its kind in the 143 years that the lender has been in business.
Through a new entity, the Ohio and Huntington Job Growth Partnership, the bank has committed to fund $1 billion in new loans over the next three years to small- and-medium-sized businesses in Ohio for job creation.
The partnership will distribute $250 million of the loan total through a preferred loan product, called the Huntington Job Growth Fund, which the bank has said will be highly competitive.
The partnership also looks to have enough clout to leverage existing Ohio and Small Business Administration loan programs to maximize the availability of funds for companies in Ohio or for those that move to the state.
“With $1 billion in new lending capacity, the partnership will retain and grow Ohio jobs, inspiring confidence in our business and hope for our workers,” said Ted Strickland, Ohio governor, in a release.
Huntington Bancshares Inc., the bank’s holding company, is headquartered in Columbus.
“Business as usual is not an adequate response to our current economic challenges, and we cannot afford to sit idly by while businesses lack the credit they need to survive in today’s troubled economic times and prepare for growth as the economy recovers,” said Huntington President and CEO Stephen Steinour.
Like Michigan, Ohio has lost lots of good-paying manufacturing jobs this decade and had a seasonally-adjusted unemployment figure of 9.5 percent in March. And like Grand Rapids, Columbus is trying to capture businesses in the medical and bio-tech industries.
Larson Medical Products, a medical thermoplastics manufacturer in Columbus, was the first to benefit from the new Huntington program, as the firm received a $100,000 loan it will use for research and development.
So is a similar lending program on Huntington’s drawing board for Michigan?
“There aren’t any immediate plans to do that in Michigan, at this point. Not to say that it won’t happen down the road, but I’m just not aware of any effort under way to forge that partnership at this point,” said Michael Lindley, marketing director for Huntington Bank, from his office in Grand Rapids.
Still, Lindley pointed out that Huntington remains an active business lender locally. The Small Business Administration named the bank as it number-one lender last year in West Michigan.
“We continue to support small business lending. We actually made over $1 billion in loans in 2008 in this region. Even in our advertising, we’re talking about a $1 billion pool of dollars available for lending for businesses, home mortgages and consumer lending in this West Michigan region in 2009,” he said.
“So we’re very active in trying to keep loan volume going. Certainly times are more difficult now with unemployment and things, while certain credit standards have not changed. It’s certainly a more-challenging environment. But particularly in the SBA category, we’re seeing an increase in volume.”
Lindley said a new and more flexible SBA loan program, which offers lower fees, has appealed to area business owners.
In March, the agency eliminated some loan fees and reduced others as part of the economic stimulus bill and also raised its guarantee on 7(a) loans to 90 percent. A few weeks ago, the SBA temporarily adopted new standards that allow more businesses, like automotive dealers, to become eligible for its 7(a) loans. The new eligibility standard runs though Sept. 30, 2010; a change the SBA estimated will make 70,000 new businesses eligible for the loan program. Michael Moraw is Huntington’s loan officer for SBA products.
“It’s been very good business for us and a good product for our customers,” said Lindley.
The Coleman Report, a California-based industry publication that follows SBA lending, predicted last month that Huntington Bank would be the third-largest SBA lender in the nation by the end of this year. At the end of the first quarter, Huntington’s SBA 7(a) loan volume topped $50 million.
The partnership the bank made with Ohio could be the first the lender has ever had with an entire state, but it may not be the last.
“This is the first commitment of this sort for some time for Huntington, not to say we haven’t done this somewhere in the past,” said Lindley. “But certainly in the near past this is a newer type of commitment for us; a partnership with a state like this.”