Nebraska Business Development Center (NBDC) consultants couldnt help but notice the economic contraction of the last half of 2008. In 2007 NBDC had 269 small business loans approved for $41.2 million. In 2008 NBDC had only 174 loans approved for $30.5 million. The decline was not due to reluctance by banks to approve commercial loans. The percentage of NBDC prepared loan packages approved actually increased. It was due to a significant drop in loan demand by small businesses.

Small businesses need loans for discrete reasons: to start an enterprise, to expand an enterprise, to finance an acquisition, to provide operating capital, or to restructure. The most significant drop in loan demand by Nebraska small businesses in 2008 was for start ups, expansions and acquisitions. An indicator of economic turnaround rests heavily in a return for demand in these areas. So far, the indicators are mixed.

NBDC client activity is a good barometer of small business health and attitude in Nebraska because NBDC consultants package about a third of U.S. Small Business Administration loans in the state. Demand for loan packaging has significantly increased in the first half of 2009. Both the size and number of deals is impressive.

In the Omaha, Lincoln and northeast Nebraska demand has rebounded significantly. Though there are more restructures than in 2008, they represent less than 15% of demand by number of loan packages. In western Nebraska demand has also increased but restructuring accounts for a much higher percentage of that demand, about 60%. Still, even in western Nebraska there are hopeful signs.

For instance, the NBDC office in Kearney recently completed loan packages for a $1.5 million project in Ord. Larry Waller and Craig Volger had the experience and entrepreneurial spirit to organize Speeds Apple Market, a modern grocery store that provides Ord area residents with an alternative to with an alternative to driving to Grand Island to shop. It also provides 26 jobs in Ord. As with many NBDC loans, the package was the coordination of two packages  a $1.1 million SBA 504 loan with the Nebraska Economic Development Corporation and a $254,000 SBA 7a loan with the Bank of Scotia. NBDC Consultant Odee Ingersoll also provided GIS data and premium industry research to support the store location decision and sales projections.

Perhaps serial entrepreneurs should become experts in putting together their own loan packages. But, business loans are actually done infrequently by entrepreneurs. Thats why NBDC is proud of its ability to help entrepreneurs get projects like Speeds Apple Market done. And, our involvement in these kinds of deals is a reason we are optimists about the future of Nebraskas economy.