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Small-biz lending on the rise

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More small businesses in Indiana are turning to a federal loan program to help finance expansions—an encouraging sign the economy is beginning to improve.

Loans and loan amounts for such fixed assets as real estate and equipment are up significantly for two Indianapolis area groups that administer the loans.

The Indianapolis-based Indiana Statewide Certified Development Corp., the largest of five CDCs in the state, works with local lenders to provide loans from the U.S. Small Business Administration’s 504 loan program.

Through the first six months of the fiscal year beginning Oct. 1, Statewide CDC has approved more than $16 million in loans for 22 projects. The amount is more than double the amount approved in the same time frame of the previous fiscal year. It is also the third-highest dollar amount administered in the first six months of a fiscal year in the Statewide CDC’s 27-year history.

Federal lawmakers created the 504 loan program to give small business owners another option to obtain financing to fund expansions.

“The fact that we are approving more alternative loans is a signal that the SBA 504 loan program is more relevant than ever,” Jean Wojtowicz said in a prepared statement. “With 504 loans, the lenders can reduce their risk and provide their borrowers with affordable financing so they can grow.”

Since 1984, Statewide CDC has provided more than $344 million to 911 Indiana companies, which have created an estimated 26,000 jobs.

CDCs in Indiana are located in Fort Wayne, Portage and South Bend. Another is in Indianapolis: Premier Capital Corp.

Premier, through the first six months of the fiscal year, has helped provide more than $9.3 million in financing for 25 projects. The number of loans Premier has administered in the first six months of the fiscal year nearly matches the 29 it did for all of the previous fiscal year, Executive Director David Amick said.

“Nowhere in my wildest imaginations did I expect we would double our volume we did in 2009,” he said. “We’re seeing it across the entire state.”

Amick attributed the uptick in lending activity to small business owners who are beginning to spend cash reserves they accumulated while waiting for the recession to subside.
 

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  1. You are correct that Obamacare requires health insurance policies to include richer benefits and protects patients who get sick. That's what I was getting at when I wrote above, "That’s because Obamacare required insurers to take all customers, regardless of their health status, and also established a floor on how skimpy the benefits paid for by health plans could be." I think it's vital to know exactly how much the essential health benefits are costing over previous policies. Unless we know the cost of the law, we can't do a cost-benefit analysis. Taxes were raised in order to offset a 31% rise in health insurance premiums, an increase that paid for richer benefits. Are those richer benefits worth that much or not? That's the question we need to answer. This study at least gets us started on doing so.

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  3. Jim, thanks for always ready my stuff and providing thoughtful comments. I am sure that someone more familiar with research design and methods could take issue with Kowalski's study. I thought it was of considerable value, however, because so far we have been crediting Obamacare for all the gains in coverage and all price increases, neither of which is entirely fair. This is at least a rigorous attempt to sort things out. Maybe a quixotic attempt, but it's one of the first ones I've seen try to do it in a sophisticated way.

  4. In addition to rewriting history, the paper (or at least your summary of it) ignores that Obamacare policies now must provide "essential health benefits". Maybe Mr Wall has always been insured in a group plan but even group plans had holes you could drive a truck through, like the Colts defensive line last night. Individual plans were even worse. So, when you come up with a study that factors that in, let me know, otherwise the numbers are garbage.

  5. You guys are absolutely right: Cummins should build a massive 80-story high rise, and give each employee 5 floors. Or, I suppose they could always rent out the top floors if they wanted, since downtown office space is bursting at the seams (http://www.ibj.com/article?articleId=49481).

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