Poultry loans help Small Business Admin. to record year in Delaware
An unexpected industry helped the Small Business Administration nearly double its record for loans backed in Delaware in the past year.
As Delaware Public Media's Annie Ropeik reports, it's the poultry industry, which accounted for $30 million of the $112 million the SBA backed since last September.
SBA District Director John Fleming is used to backing loans for businesses like restaurants, hotels and stores. So he was surprised to hear from Tyson Foods, a major international distributor of chicken, beef and pork products -- like Ballpark Franks and Hillshire Farms sausages.
"They have a relationship with a bank that's an out-of-state bank, and they do this apparently throughout the whole country," he says. "They came here in Delaware and are really racking up the numbers."
Tyson used $30 million in SBA loans to finance chicken houses in Kent and Sussex Counties.
"It's very surprising," Fleming says. "SBA's normal model is not Ag -- there's a Dept. of Agriculture out there, the USDA, they do lending as well. Sometimes there's some overlap between us and them, and this is one of the areas."
He says the SBA can offer a slightly longer loan term than the USDA, among other differences.
But Fleming says even without that boost, the First State SBA would have beat their previous year-end record of $57 million. In the past twelve months, he says they saw big gains in Kent County hotels and restaurants -- and they backed more loans for businesses owned by veterans, specifically from Dover Air Force Base.
"We talk to the soldiers and airmen that are transitioning out," he says. "Probably 80 percent don't stay in Delaware, they're from other states, but others have gone through our program, and actually some have started businesses right here in Delaware. So that's where we're seeing that big increase."
He notes that loans under $150,000 for vets have their fees waived.
Fleming isn't sure they can match this year's big boom next year -- but he's hopeful that new staff doing more grassroots work in each county will continue to pay off.