PORTLAND, Maine — Regional U.S. Small Business Administration leaders took advantage of the Valentine’s Day traffic and symbolism at a Portland flower shop Thursday to tout the agency’s role in the state and nation’s economic recovery.
The SBA backed 27 percent more loans to Maine small businesses in January 2013 compared to the previous year, increasing money in circulation for startups or expansions in the state by more than $4.2 million year-to-year.
Acting SBA Regional Administrator Jeanne Hulit visited Portland’s Sawyer & Co. Florist on Congress Street on Thursday morning on its busiest day of the year to trumpet the increase in capital the federal agency is pumping into the business market.
Hulit, taking full advantage of Valentine’s Day imagery, said she planned to stop by the flower shop to illustrate that her agency is “sweet on small businesses” — a line likely too long to fit on a candy heart, but was more than just sweet nothings for the entrepreneur hosting the visit Thursday.
Sawyer & Co. owner Dan Kennedy benefited from an association-backed loan of $65,000 from Katahdin Trust Co. to help acquire Minott’s Flowers on Temple Street in the city last November. The acquisition expands Kennedy’s bouquet of flower shop brands to three, after his 2007 purchase of Harmon’s & Barton’s.
Kennedy, an Argyle native, got started as a florist working for his uncle in Bangor in 1974, before opening his own shop in the mid-1980s in Milford, moving to Portland in 1990 and ultimately buying Sawyer & Co. in 2000.
But despite Kennedy’s track record of four decades in the field, he said he faced difficult odds seeking capital to grow his family of flower shops last fall.
“We looked at other options, but with our industry, a lot of institutions don’t like to lend,” he said Thursday, noting that flower shops are often seen as risky ventures in part because of the perishable nature of the goods.
“We guarantee loans lenders could not otherwise make, whether it’s because of the length of time [the loan-seeking company has been in business], or because the loan is just outside of their credit box,” Hulit said.
Hulit said two-thirds of all new net jobs come from small businesses starting or expanding, and the SBA is backing $90 billion in business loans nationwide, ranging from “very small amounts to as much as $5 million” each. By pledging to cover between 50 and 80 percent of the loan amount for the local lending institution if the business fails, the SBA, which often first does its own study of the viability of the business proposal, reduces the financial risk to the lender.
Lubricating the lending market has been a key job as the state and nation climb out of the recession, Hulit said. When the 2008 financial crisis hit, banks nationwide clamped down on loans, making life difficult for entrepreneurs hoping to expand, innovate or go solo after a layoff.
The SBA stood behind $25.3 million in loans to small Maine businesses in January of 2013, compared to just more than $21 million one year earlier. The number of SBA-backed loans in circulation grew from 91 in January of 2012 to 116 last month as well.
The SBA has in recent years been led by Maine resident and former venture capitalist Karen Mills, of Brunswick. Mills announced this week she plans to step down from the post after holding it for most of President Barack Obama’s first term in office.