Study: NH Small Businesses Saw 39% Drop in Credit in 2009

At Bow Rotary Club, Kuster Releases Study and Calls For Small Business Support

BOW, NH – New Hampshire’s small businesses saw a 39% drop in federally-guaranteed loans last year, from $127.8 million in 2008 to $79.8 million in 2009, according to a new report released by congressional candidate Ann McLane Kuster, who spoke about the need for more small business support at the Bow Rotary Club this morning. Kuster is running for U.S. House of Representatives in the open seat in New Hampshire’s second congressional district.

“It is simply unacceptable for Washington to focus its efforts on passing massive bailouts for Wall Street while New Hampshire’s small businesses are struggling,” said Ann McLane Kuster. “Small businesses make up the backbone of our state’s economy and they employ more than half of all workers in the New Hampshire. They deserve to be put first, not last, when it comes to making sure they have the tools they need to grow our economy.”  

“There are many reasons for this drop in small business lending last year, including decreased demand for loans; the natural tightening of credit in this economic climate; and the increasing difficulty for small business owners to point to a history of strong growth or large profits when they are asking for loans.”  

“Just as there are many reasons for this decline, there is also no silver bullet to fixing this. New Hampshire’s community banks are doing their part to help keep our small businesses strong, but Washington needs to do its part too. Especially in today’s challenging economy, we need to do everything we can to support small business owners and ensure they have the tools and resources to grow and hire new employees.”

Over half of New Hampshire’s workers – 54.9% in 2006 – are employed by 32,103 small businesses across the state.

The US Small Business Administration underwrites two primary types of loans, which are offered by private banks throughout New Hampshire: “7(a)” loans to startups and existing businesses, and “CDC/504” loans for major purchases just as new equipment or buildings.

Below is the data for small business loans authorized in New Hampshire over the past five years:

• 2009: $79,856,680 in loans to 562 businesses
• 2008: $127,840,550 in loans to 589 businesses
• 2007: $123,066,185 in loans to 743 businesses
• 2006: $119,008,230 in loans to 1,090 businesses
• 2005: $137,422,966 in loans to 1,043 businesses

This drop is consistent across most towns and municipalities in New Hampshire. In the town of Bow, lending fell 27% from 2008 to 2009, to the lowest point in the past five years. In the city of Nashua alone, federally-backed loans fell from $6.4 million in 2008 to $2.4 million in 2009. Similar statistics can be provided for any other town or city in the state by contacting the Kuster campaign. Earlier this month, President Obama traveled to Nashua, NH to put a spotlight on his proposal to extend additional loans through community banks.

In order to strengthen New Hampshire’s small business sector, Kuster supports:

1. Extending $30 billion in repaid bailout funds to community banks for expanded small business loans.
2. Eliminating all capital gains taxes on small business investment.
3. Tax credits for investment in new plants and equipments.
4. Investing in clean energy technologies that are currently flourishing in New Hampshire as a way to help new startups create jobs.

Kuster is currently engaged in a month-long tour of the New Hampshire employers, meeting with local  businesses, nonprofits, and workers to hear firsthand about the challenges they are facing and the ideas they have for growing jobs. She has met with workers and managers from some of the state’s earliest-stage start-ups to its largest employers, from the Massachusetts border to the Berlin paper mill, as well as related community institutions that contribute to the labor market such as community colleges and nonprofits.

Earlier this week, the U.S. Senate Banking Committee held hearings on “Restoring Credit to Main Street: Proposals to Fix Small Business Borrowing and Lending Problems.” Additional background information on the topic, including SBA 7(a) lending background information and perspective of community banks on the topic, please see the testimony here.

Born and raised in Concord, Ann McLane Kuster has a long history as a community activist, author, public policy advocate, and attorney with deep roots in the Granite State. She worked with New Hampshire colleges to create the UNIQUE 529 College Savings Program to help families save for their children to attend college, and worked with a coalition of health care providers to create the Medication Bridge Program that distributes free medication to New Hampshire families and seniors who cannot afford the high cost of prescription drugs. She has served as a board member or advisor to the NH Charitable Foundation, the Trust for Public Lands, Child and Family Services of New Hampshire, the United Way, and many other community groups.

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