Ashland, Richland counties earned $10 million in 2024 SBA funding
ASHLAND — Ashland County ranked in the top 40% of counties in Ohio for Small Business Administration loans by population last year.
According to data from the U.S. Small Business Administration’s Columbus district office, Ashland and Richland counties received 46 of nearly 4,000 approved SBA 7(a) loans to Ohio businesses in fiscal year 2024 (October 2023-September 2024).
Banks can provide SBA-backed loans that offer the lenders percentages of guaranty depending on how much they lend to an entrepreneur.
Borrowers go to a bank for a loan and the bank then applies for an SBA loan guarantee. A bank can also become an SBA preferred lender to make loan approvals and streamline the process.
Ashland County businesses received a total of $4.35 million in SBA loans where Richland County businesses received $5.8 million in SBA loans.
Knox County businesses received 5 SBA loans in 2024.
A total of 17 Ashland County businesses received more than $4.3 million. That’s a 580-percent increase in total loan amount from the previous year.
| Number of loans 2024 | Total loan amount 2024 | Change in # of loans since 2023 | Change in loan amount since 2023 | |
| Ashland County | 17 | $4,353,300 | +70% | +583% |
| Knox County | 5 | $911,900 | -37.5% | -59.6% |
| Richland County | 29 | $5,810,700 | -23% | -62.53% |
7(a) loans are meant to help small businesses with improving real estate, short- and long-term working capital, refinancing current business debt and purchasing new equipment or supplies, according to the Small Business Administration website.
SBA offers banks, borrowers different financing options
Michalina Schneider, director and certified business advisor for the Small Business Development Center at Ashland University, provides consultation and business counseling services for entrepreneurs and business owners.
“The SBA is around to help entrepreneurs,” Schneider said. “Banks are naturally risk-averse and they might not be able to help entrepreneurs who haven’t been successful yet. So the SBA has some different programs depending on your goals.”
Schneider noted SBA loans usually have a higher interest rate for borrowers than traditional loans entrepreneurs could get from a bank if they have satisfactory credit history and collateral.
“I always tell clients the best bet is to go to the more community-based banks. Local commercial lenders live and work in those communities and are more likely to understand what you’re doing.”
— Michalina Schneider, Director and Certified Business Advisor for the Small Business Development Center
“The SBA backs those loans by a percentage, so if a borrower defaults, the bank would recuperate what it could and then they can go back to SBA to get most of that money back,” she said.
“SBA loans only paint part of a picture. Some folks might be in a good economic position that they don’t need the backing of SBA, or on the other side of the coin, if they don’t have good credit or collateral that a bank would need to grant a loan, they might look into alternative financing.
“I always tell clients the best bet is to go to the more community-based banks. Local commercial lenders live and work in those communities and are more likely to understand what you’re doing.”
Resources for entrepreneurs
A national survey of 3,000 business executives released in July 2024 listed Mansfield as the 50th ranked city in the nation considered a “hidden gem” for launching a startup.
Support from the Richland Area Chamber and Braintree Business Development Center were specifically highlighted, as well as the area’s strategic location and lower cost of living. Akron, Ohio was ranked 7th and Canton was ranked 47th in the same survey.
Here are resources for business and entrepreneurs in north central Ohio:
Park National & Mechanics banks saw over commercial loan growth in 2024
Despite a decrease in SBA loans in the county, Richland County banks said commercial lending as a whole increased last year.
Park National Bank’s 2024 annual report highlights a 6-percent increase in commercial lending in 2024 compared to 2023.
Park National’s northern Ohio region is comprised of Ashland, Crawford, Holmes, Knox, Marion, Morrow and Richland counties. The bank recorded a $10 million increase in total loans offered last year compared to 2023. Loans last year in the northern region rang in at $1.37 billion.
Park National regional president Chris Hiner said 2024 was one of the bank’s top years for loan volume.
“Looking at the SBA data, we didn’t utilize that program as much, but lending as a whole was up,” Hiner said. “I’m not surprised to see that fluctuation from year to year. I wouldn’t say it’s an indication of something poor happening in Richland County or a decrease in economic activity by any means.
“SBA is one of the tools in our toolbox. If a customer doesn’t have a long financial history, or collateral challenges or something — the SBA could help in that aspect.”
Hiner also noted Park National Banks uses a number of other federal and state programs for different situations.
“The Ohio Statewide Development Corporation has helped us with 166 loans before. We’ve relied on the Ohio Capital Corporation for Housing,” he said. “Depending on each customer’s individual situation, we can use different programs but we always look for the most advantageous opportunity for the customer.”
“Keeping an open line of communication with your banker is going to be key to how you get to your goals. That open dialogue about your short and long-term goals helps you get to the best possible outcome.”
— Chris Hiner, Park National Bank regional president and home lending director
Real estate, equipment top Mechanics Bank commercial lending for 2024
Senior Credit Officer for Mechanics Bank Phil McClenathan also shared that Mechanics saw a commercial lending increase in 2024.
“We were able to support a wide variety of business needs in 2024 including new construction, remodeling of existing facilities, financing to support business growth, and helping new business owners achieve their goals,” he said.
McClenathan said last year’s most frequent lending categories in 2024 were for commercial real estate and equipment/ business assets. He said Mechanics’ lending balances increased nearly 20% from 2023.
Mechanics has lent SBA loans previously, but McClenathan noted the administration can require more time or costs than traditional commercial loans.
“Typically, the SBA requires the borrower to spend a considerable amount of time compiling sound financial statements,” he said. “This can be inconvenient for those businesses that only produce this information once a year when filing their tax return.”
McClenthan echoed Schneider’s sentiments of local banks and commercial lenders being willing to help small businesses.
“When you talk with (Mechanics), you can rest assured that you’re talking with local decision makers who work in the same community as you.”
— Phil McClenthan, Mechanics Bank Senior Credit Officer
“We’re not just your bank — we’re your neighbors,” McClenthan said. “We are grateful for the trust of our business customers and are thankful for the opportunity to serve our business community.”
What caused SBA loan growth in Ohio as a whole?
The maximum loan amount for 7(a) loans is $5 million, though the average loan amount was $279,062 in fiscal year 2024. Eligibility factors are based on income operations, a business’ credit history and where it operates.
The number of SBA loans in Ohio has increased by 46% since 2020, with nearly $1.2 billion in total lending in the 2024 fiscal year. In its capital report, the U.S. SBA highlighted loans under $150,000 drove “dramatic growth” in 2024. Loans to female, Black and Latino entrepreneurs also increased last year.
A total of 103,000 loans were approved nationwide in the 2024 fiscal year, as well as additional household loans for disaster recovery.
According to the capital report, this was the first time the SBA marked more than 100,000 loans. It also said leveraging technology and making it easier for lenders and borrowers to work with the SBA helped grow the program.
“The growth in SBA small loans is critical, because 7(a) loans—whether made by banks, community lenders or online lenders—carry the features that small businesses need most when shopping for a loan: affordable interest rates, fee caps, long maturities and a high standard for customer service and borrower transparency,” the report said.
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