Huntington Bancshares in Columbus, Ohio, has created a $25 million small-business lending program for women, minority and veteran entrepreneurs.
The program, called Huntington Lift Local Business, will offer Small Business Administration 7(a) loans ranging from $1,000 to $150,000. The initiative is one of the first installments on a
Huntington indicated when it announced the broad effort in September that small business access to capital would be an early priority.
As part of the new program, the $118 billion-asset Huntington will waive in-house origination fees and 36 months of service charges on a business checking account. The company will also pay borrowers’ SBA program fees.
Huntington’s previous floor for a 7(a) loan was $5,000, though most of the deals it did were significantly larger, said Maggie Ference, the company's SBA program director.
Dropping the minimum “is a meaningful change,” Ference said. “We didn’t want for any business to have to stretch to get a loan.”
During a recent panel discussion hosted by American Banker, Jackie Reses, Square’s executive chairman, said a focus on small loans can be an especially effective means of helping underserved entrepreneurs.
“If you’re able to serve a [borrower] with any size loan, you really can support a broader aperture of customers,” Reses said. “Our average loan size is $7,000. If you think about the Main Street businesses across the country, that’s really what they need.”
Huntington is also lowering credit-score requirements for its Lift Local Business effort.
The program marks the first time Huntington has offered to pay program fees, which are assessed by SBA.
“This wasn’t the right time to be talking about assessing additional fees,” Ference said. “The last thing we want to right now do is burden small businesses with extra costs.”
Financial education courses offered through Operation Hope are also included as part of the new program.
Huntington was one of the nation’s most active 7(a) lenders during the SBA’s 2020 fiscal year, which ended Sept. 30. Huntington originated about 3,200 loans totaling $495 million.
Loans made under 7(a) are guaranteed up to 85% by the SBA.
