Some Iowa business owners were in Washington, D.C. this week to tell senators about the difficulties facing the agricultural economy.
Jay Funke is a farmer and sales manager at Del Clay Farm Equipment in Edgewood in northeast Iowa. Funke said low commodity prices are affecting sales in the region. “The decrease in sales causes other problems. We have larger inventories than needed for the current sales volume, causing higher interest costs, which can lead dealers to dump inventory and take losses on equipment,” he says. Funke says Congress needs to make it easier for farmers and the businesses that serve them to get loans, and ensure fair and open markets with other countries.
First Iowa State Bank chief financial officer Melissa Ann Spurgin says people trying to obtain loans through the Small Business Administration face a maze of rules and requirements, and the federal government needs to streamline the process. “SBA loans require significantly more documentation, certifications, and post-closing compliance than conventional loans, with lender staff requiring continuous training due to frequent rule changes,” she says. “The departure of just one employee can eliminate a bank’s SBA capability entirely,” she says.
Spurgin says ag businesses are often rich in assets, like land and equipment, but cash poor, amd that can make it tougher to obtain an SBA loan. The two made their comments at a hearing of the U.S. Senate Small Business Committee Wednesday.
(By John Wannamaker, Iowa Public Radio)