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No time like the present
Monday, March 29, 1999
Economic conditions are good, especially for construction, high-tech and retail businesses, bankers say
by Tyrone Beason
The economy's growth may be slowing and unemployment may be creeping back up, but for those wondering whether now is a good time to start a small business in the Seattle area, the answer is still "yes," banking and business experts say.
"The climate is still good - for the right kinds of businesses," said Pacific Northwest Bank President Pat Fahey.
Fahey says owners of small technology companies and construction businesses are among the bank's most common loan applicants. Construction, high technology and retailing are three of the hottest industries in the Seattle area right now.
Last year, Pacific Northwest Bank approved 36 Small Business Administration-backed loans, the most in its history, Fahey said. And small-business loans in general are up 24 percent at the bank since February 1998.
"I suspect that (upward trend) will hold up this year," he said, noting growing concern over the economy may become a factor later.
Timing depends a lot on the market for a business's goods or services, those in the financial services industry say.
Wells Fargo Bank has helped finance a number of so-called "niche businesses," or small companies with a very specific client base, such as circuit-board makers and aerospace-supply firms, said Steve Kelley, vice president and Washington area manager for business banking. Web-based businesses also seem popular as new ventures, he said, noting the bank recently made a loan to an online steel supplier.
If an entrepreneur can show there's a potential customer base for a new venture, banks that lend to small companies are likely to compete for that business, Kelley said. That may mean lower interest rates and fees on loans and other terms favorable to borrowers, Kelley said.
He said Wells Fargo plans to increase the number of loans to small businesses as much as 50 percent this year, while doubling its commercial loan staff in the next 12 months.
"We don't see a slowdown in the near future," he said.
Why so optimistic? Kelley points first to historically low unemployment nationwide and in the Seattle area. But he also notes that recent runs in the stock markets have fostered a sense of economic well-being and confidence among consumers, creating what Kelley calls a "spending environment."
In short, people have money and are more likely to part with it.
That's good news for small businesses.
Tyrone Beason's phone message number is 206-515-2251. His e-mail address is: email@example.com
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