Loan portfolio tops $100 million

More than 25 years ago, as the Hamilton County Development Co., Inc. was still in its start-up phase, there were some doubts that we would even earn the U.S. Small Business Administration (SBA) certification needed to make loans to small businesses.

That’s understandable.  In the world of SBA certified development companies, a sizable number made very few, or even no loans, and today fewer than half survive.

However, HCDC’s lending organization, the Horizon Certified Development Company quickly became a high-volume certified development company, consistently ranked first or second in the State of Ohio and in the top 10 percent nationally.  Our years of growth have paid off, as we just hit a major milestone, topping the $100 million mark in our loan portfolio for the first time.

A few years ago, it seemed only a matter of time before HCDC’s portfolio would top $100 million and then some. However, a precipitous reduction in loan interest rates caused us to experience a significant number of early prepayments.  In addition, as the loans mature, more principal than interest is being paid each month, also reducing the portfolio’s outstanding loan balances.

Nevertheless, even in this economic downturn, new loan fundings have held up, and HCDC reached the $100 million mark.  Is this cause for celebration?  I think so.  This makes Horizon the largest certified development company in the state of Ohio, makes us better at what we do, and enables us to more effectively deliver the SBA’s 504 program than those who only process a small number of loans.
 
HCDC’s portfolio is well diversified, with the largest sector, metal manufacturing, making up only 10 percent of the total.  Other industry concentrations include accommodations and food services, professional/technical services and health care services.

Has HCDC been affected by the economic downturn?  It has, but in March of this year, things appeared to have bottomed out and lending activity is increasing.

We are still nearly 34 percent below the levels of 2008, but with a reduction in loan fees and attractive fixed-interest rates, this is an opportune time for small businesses to acquire real estate at attractive prices and finance it at some of the lowest interest rates in the history of the 504 loan program.