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Springfield, MO

GOT YOUR BACK: Elite Outdoor Innovations owner Clint Harlan’s Bobcat skid steer is part of the equipment he purchased with a Small Business Administration-backed loan.
SBJ photo by Wes Hamilton
GOT YOUR BACK: Elite Outdoor Innovations owner Clint Harlan’s Bobcat skid steer is part of the equipment he purchased with a Small Business Administration-backed loan.

Financing the Dream: OakStar moves into local SBA market lead

Overall loan values and quantities increase

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Situated in the rolling hills of Rogersville, Elite Outdoor Innovations’ office comprises two commercially zoned properties with a view. The outdoor architecture and land irrigation business employs 31 and has year-to-date revenue of $2.1 million, but owner Clint Harlan started the company 18 years ago with just a truck and trailer.

Part of this growth included the 2012 purchase of Spruce It Up, a Springfield hardscape and landscape design firm. With that acquisition came the need for more equipment.

Enter a U.S. Small Business Administration loan.

Harlan received his first and largest SBA-backed loan, at $1.2 million, in 2015. A $100,000 loan was taken out the next year, and Harlan currently is finalizing his third SBA loan, the latest for $250,000.

“Those other loans were just to help accommodate business equipment and the needs of the customers,” Harlan said. “It is there and you look for it as long as you qualify. It’s a good way to grow your business to meet your dreams, goals and aspirations.”

All three of Harlan’s notes were secured through OakStar Bank, which dethroned Simmons First National Corp. (Nasdaq: SFNC) as the top SBA lender in the five-county Springfield metropolitan statistical area at the Sept. 30 end of fiscal 2017. Simmons, and its predecessor, Liberty Bank, had an 18-year run at the top.

Springfield-based OakStar led in both total loan value and number of loans, according to data provided by SBA’s Kansas City office showing the Top 10 SBA lenders in the five-county Springfield MSA, ranked by total loan value.

OakStar issued 43 SBA-backed loans worth a combined $15.3 million during fiscal 2017. Simmons slid to No. 3 with 33 loans totaling $9.8 million.

However, in the 28-county Kansas City region including Springfield, Simmons remained on top in total loan volume with 55 SBA loans totaling $16.9 million in fiscal 2017. OakStar followed closely with 52 loans also totaling $16.9 million. Rounding out the top five in the region were The Bank of Missouri with 33 loans, Guaranty Bank with 26 and Rural Missouri Inc. with 22.

Arkansas-based Simmons entered the Springfield market through a 2015 acquisition of Liberty Bancshares Inc. It continued the company’s SBA lending lead in the Springfield MSA – Greene, Christian, Webster, Polk and Dallas counties – between 1998 and 2016, according to Springfield Business Journal reporting and list research.

The Simmons and Liberty merger
Simmons Regional SBA Banker Christian Lewis is a former Liberty employee who remained through the acquisition. He specialized in working with small businesses and continues that work in his new role in addition to training Simmons employees on SBA loans.

The merger, he said, may be a reason why Simmons’ market share dipped.

“There can be fallout, whether it be from the merger, and just getting adjusted to a new system. That happens with any type of bank merger,” he said. “So contacts that happened and relationships made from that turnover – there was business that did not come through the doors as part of that merger that trickled into this year.”

Lewis said Simmons officials have been emphasizing training SBA lenders within the company to work with small businesses. Being a niche loan program, Lewis plans to help more lenders become comfortable with the process.

“We are still SBA focused. We see the value in the small business as the heartbeat of the economy and want to make sure we are there to help and support that,” Lewis said.

SBJ’s attempts to contact an OakStar SBA lender were not returned by press time.

OakStar also seems to be expanding its loan options as it recently welcomed a new commercial lender to the Farm Service Agency Loan market. Dylan Holloway, based in Bolivar, said his process is similar to SBA.

“The main reason I think they wanted me to come here is to grow agricultural lending up there in Bolivar,” he said. “Being more of a rural area, we are more prone to do that type of lending, so they wanted to expand that within the company. It’s hard around Springfield to grow that part of our portfolio.”

Market confidence
Despite fluctuations of leaders on the SBA loan throne, SBA Lead Lender Relations Specialist Thomas Daiber said loan users are becoming more confident about signing the notes.

According to SBA reports covering 28 counties in southwest Missouri, of the 348 loans approved between October 2015 and September 2016, loan volumes rose 38 percent to $146 million from $105.8 million in the SBA’s fiscal 2015.

Daiber attributes the increase to economic confidence.

“Missouri has got a fairly positive viewpoint in economic structure, so I do see more small businesses are doing business in Missouri and expanding,” he said.

This could increase even more, Daiber said, if Missouri streamlines its workforce pipeline to keep graduates in the state.

“A number of our loans are from startup businesses,” he said. “That’s another way we can keep some of that talent in the state.”

Daiber said the average SBA loan in southwest Missouri is $400,000, though some are as low as $5,000 and as high as $5 million.

When Elite Outdoor Innovations’ Harlan took out his first loan in 2015, he said he was confident in the availability for work in his industry in the Springfield market.

“What’s given me more confidence as a business owner, and security, is knowing the phone is ringing and there is construction,” he said. “I felt comfortable enough with the way the economy sat that I could take the risk.”

Harlan said his company’s biggest roadblock is not the economy or ability to acquire loans, but rather finding workers.

He’s projecting a nearly 30 percent revenue increase this year. Harlan attributes this revenue increase to H-2B temporary visas that helped him find workers. However, finding long-term workers, he said, is difficult.

“Our problem is not with money, our problem is with workers. We could be twice as big if we could find people to work,” he said. “There is a lack of people who are willing to fill physical sweat equity type positions. There is a need for that, which is why we had to reach out with H-2B visas, and it was a good move for us. It helped our customers and our business in general. Now, we are battling next year not getting visas again. It’s all touch and go. It’s hard to plan a year out in advance when you don’t know what your workforce is going to look like.”

With a seasonal company, Harlan said there also are additional hoops to jump through to prove he could pay back the SBA loans.

“We dig dirt for a living. We are a seasonal business,” he said. “You really have to prove yourself worthy of lending. It comes down to how well you know the business side.”

Harlan said a key to earning SBA-loan approvals in three successive years was investing in good bookkeeping software. The process initially was daunting, though.

“SBA is a double-edged sword. It’s a lot of hard work, but I wouldn’t discourage it. Don’t be scared of the process,” he said. “It wasn’t like a monster you’re afraid to look in the eye and tackle.”

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