While nationwide lending to small businesses has dropped off dramatically, local financial institutions say their small business lending hasn’t tapered off much.

“We have always had money to loan small businesses,” said Dean Johnson, manager Tooele Branch of Zion’s Bank.

The Tooele Branch of Mountain America Credit Union has also made several loans this year to small businesses throughout Tooele County, said Kris King, manager of Mountain America’s Tooele branch.

“I don’t think our business has dropped off,” King said. “And with the stimulus package, small business loans will be even more accessible.”

King said Mountain America was the first credit union to get into the small business loan market in the state of Utah.

“Our business express line of credit offers loans between $5,000 and $50,000 with larger loans available through other programs.”

The average small business loan is $27,000, according to King, with interest rates varying based on the prime rate.

Statewide in January and February of 2009 Zion’s Bank completed 98 loans guaranteed through the Small Business Administration (SBA). During the same time period in 2008 Zion’s Bank completed 87 SBA loans, according to Rob Brough, executive vice-president of Zion’s Bank.

That is a 12 percent increase, and compared to the national scene, Utah is doing much better in small business loans.

“Nationally SBA loans are down by 45 percent over the same time period last year,” Brough said. “Currently the Utah district of the Small Business Administration is making more loans last year than any other district in the country.”

The decrease in loans is due to a lower demand, not any change in the availability of loans, according to Brough.

“The underwriting requirements for small business loans have not changed,” Brough said. “Applicants have always needed a good business plan and credit worthiness.”

Small businesses can use SBA loans for a variety of purposes, from making capital improvements to purchasing new equipment and paying expenses related to business expansion.

One local business that’s benefited from an SBA loan recently is Nails! in Tooele.

“We applied for an received our SBA line of credit in June,” said Huong Egelund, owner of Nails!. “We used our SBA line of credit along with some of our own money to do a complete salon makeover.”

Egelund bought new pedicure stations, technician tables and chairs. She also remodeled the rest of the room with new carpet and paint.

Another company that benefited from a small business loan last year was Aire Expresso, an air conditioning company.

“I applied for and received a small business loan last summer,” said Mauriscio Lizana, owner of Aire Expresso. “I used the money to pay my accounts payable while I wait for people to pay me.”

The loan has helped Lizana avoid interest and late charges on his bills.

“The only other solution I would have would be to pay things with my credit card and run up a balance with a much higher interest rate,” Lizana.

Being able to reduce expenses through using the line of credit to manage cash flow and keep expenses down has helped Aire Expresso stay in business during the current slump in construction, Lizana said.

At Wells Fargo Bank in Tooele, assistant manger Mark Hicks reports that hey have seen a slight decrease in applications for small business loans.

“In general we have seen fewer applications for small business loans over the last year,” Hicks said. “I am not sure what to attribute the change to, we have not changed our lending policies.”

At HeritageWest Credit Union, President Steve Christensen said they have seen fewer applications for loans but with the recent changes the Small Business Administration has made that trend might be changing.

“The SBA has recently lowered their fees for loans and increased the amount of the loan that they insure,” Christensen said. “That should make SBA loans more attractive.”

“The money is there for loans to small businesses,” Brough said. “Many business owners have a perception that things have changed, that the money is not available or it is more difficult to get. That just is not true.”

Tim Gillie: tgillie@tooeletranscript.com