South Dakota experienced a near-record year in small business loans as the rest of the nation struggled with hardening economic times.

South Dakota was one of only four Small Business Administration districts to meet its goals during fiscal year 2008, which ended Sept. 30.

The state recorded an 8 percent increase in SBA loans, while the number of loans nationwide dropped 29 percent.
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John Brown II, SBA district director, attributes the good year, in part, to a strong South Dakota economy that doesn't feel the sweeping ups and downs that some states experience. But he also said the agency started to take action when it noticed national lenders might start tightening the reins.

"We've been laying a groundwork for a lot of this," Brown said. The group went out and met with bank officials across the state last year to broaden the number of lenders they work with.

"The national lenders were starting to feel a pinch and their numbers were declining, and so by broadening our base, a lot of our community lenders started to pick up the pace," Brown said.

Still, Brown said South Dakota isn't completely resilient. The first two weeks of October already are substantially down over the previous year, though it's too early in the new fiscal year to draw a clear picture.

Surprises By LJB is one business that took out a loan with the SBA earlier this year.

The loan allowed the balloon, decor and entertainment company to include DJ services and offer more of a one-stop shop for entertainment, said Lisa Jones, who owns the business with her sister, Julie.

Lisa Jones said the economy didn't play into their decision when they were deciding whether to take out the loan.

"What can you do?" she said, adding that one can only continue moving forward and hope the economy isn't too detrimental to the business.

CorTrust Bank in Sioux Falls is one community bank that works regularly with the SBA because it wants to reinvest in the community.

Roger Weber, senior vice president and area manager, said the bank probably did more loans last year because it hired one employee to handle the transactions.

Weber credits the SBA's successful year with reaching out to community banks and making sure the programs are user-friendly.

In past months, Weber said the economic turmoil hasn't played a part in how it issues SBA loans.

"I think the biggest thing is the economy probably plays a part on maybe how many requests we have. In softer times, we just may have less requests than we would have normally."

source: http://www.argusleader.com/apps/pbcs.