.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} One morning recently, banker Curtis Chrystal met with the owner of a West Des Moines start-up company seeking a business loan. By that afternoon, his bank’s loan analysts in Nashville, Tenn., were crunching numbers, and within about 48 hours, Chrystal had “some concrete answers” for the business owner.

“That’s a fairly typical (turnaround time) for us,” said Chrystal, senior vice president of commercial lending for Regions Bank in Urbandale.

With so many banks vying for small business borrowers in Greater Des Moines, “it’s never been more competitive,” said Kevin Smith, a senior vice president at West Bank. “I think all the new branch locations have outpaced our market growth overall, so you see more bankers competing for the same slice of pie all the time.”

In addition to borrowing from banks, small businesses in Iowa now have the ability to seek loans from most credit unions in the state through a program launched two years ago by two Central Iowa credit unions and the Iowa Credit Union League.

Large institutions such as Regions, which use remote teams of credit analysts around the country to evaluate small business loans, say the technique gives them a competitive edge, yet allows local representatives to weigh in on the decisions.

Representatives of smaller, locally based institutions such as West Bank, on the other hand, say their relationship banking practices and local decision-making continue to differentiate them from the mega-sized banks.

Regardless of their size, bankers are finding that Central Iowa entrepreneurs have become increasingly sophisticated in their financial needs and have raised their expectations about what lenders should provide.

Herb Eckhouse, who three years ago launched Norwalk-based La Quercia LLC to make prosciutto and other aged specialty meats, shopped a number of lenders before deciding on Great Western Bank in Clive.

Great Western was one of several banks willing to lend to the now rapidly growing company, and it won Eckhouse’s business by making the most attractive offer from the beginning.

“Other banks, once we told them we had another offer, were willing to change theirs,” he said. “I feel better when someone makes their best offer at the beginning, because I’m more confident they’re going to make good offers in the future.”

Eckhouse said he found some other banks he approached, including Bankers Trust Co. and Wells Fargo Bank N.A., the latter of which he already had a banking relationship with, were unresponsive to his small business loan request. “The smaller banks were much more responsive,” he said.

As for credit unions, Community Choice Credit Union of Johnston and Members1st Community Credit Union of Marshalltown partnered with the Iowa Credit Union League in 2005 to form Community Business Lenders. The initiative, which seeks to expand credit unions’ small business loan portfolios, provides underwriting, documentation, closing and servicing to 60 credit unions statewide.

“We have seen strong interest in credit unions competing for business loans,” said Mark Kilian, chief executive officer of Community Business Lenders. “We’re seeing that activity in urban and rural areas and all across the state. We’re excited that we’re seeing that kind of deal flow from the diversity of credit unions that we’re seeing it from.”

The dollar value of loans outstanding among CBL’s participating credit unions increased by 455 percent in 2006 over 2005, Kilian said, with the number of credit unions making business loans to their members increasing 176 percent in the same period.

Most of the business loans made are shared by more than one credit union to reduce the risk, with an average of three or four credit unions funding each deal, Kilian said.

Sherry Shafer, director of the Small Business Development Center at Drake University, said despite heightened competition among lenders, small businesses must have their ducks in a row if they expect to get a loan.

“A lot of individuals in the world are either short cash, collateral, or have gotten tied up in some past credit issues,” she said. “Basically, it’s not an entitlement program; it’s a loan.”

Personal credit problems can sometimes represent a barrier to receiving a business loan, regardless of the quality of the business plan, Regions’ Chrystal said. If the credit problem was a result of a one-time incident such as an illness, however, that may mitigate its impact on the lending decision, he said.

On the other hand, West Bank’s Smith said he has seen a greater level of sophistication among current and prospective clients in recent years.

“They have a better sense of what banks can do for them, in seeking services such as treasury management,” he said. Now, transactions such as depositing checks, managing cash balances between accounts and viewing real-time data on cleared checks can be handled online from the businesses’ desktop computers.

Eckhouse, for instance, needed currency exchange services, which Great Western didn’t offer, so he picked another bank for that service. Dealing with Great Western, based in Clive, while his business is in Norwalk “isn’t ideal, but we live with it,” he said.

Great Western proved it could hang tough with his company through its start-up phase, Eckhouse said.

“We had a lot of challenges the first year, and there’s no doubt it was a lot of concern to everyone involved, us and the bank,” he said. “But nobody panicked, and that was important.

“So I think for a small business borrower, there is the analogy used that it’s like getting into bed with somebody. There is a certain intimacy when someone’s involved with your financial lifeline. … And like anything, it’s hard to tell sometimes from the dating phase.”