Farm-to-table guests at Sunfox Farm meet with chef Amber Pollock (Photo by Molly Burns Photography)
Two years ago, Greg and Amber Pollock, owners of Sunfox Farm in Concord, wanted to expand into farm-to-table dining. To do so, they’d need access to a commercial kitchen space, and Greg Pollock knew that getting a loan could be complicated.
“We’re a younger business, and also agriculture is inherently a risky business to be in, so traditional lenders tend to shy away for those two facts,” Pollock says.
The Pollocks turned to The NH Community Loan Fund, which helps facilitate loans to businesses that may not qualify for traditional lending. After securing a loan through the fund, the Pollocks had a food truck built and debuted it last August.
That’s just one example of what experts say is a well-established system within the state to help businesses access the capital they need to grow. Private banks are supported by state and federal programs that guarantee business loans, reducing risk to the banks. Several organizations, including the NH Community Loan Fund and regional economic development corporations, offer funding to businesses that might not qualify for traditional financing, even with a guaranteed loan. Mentoring and development organizations help businesses navigate access to capital and prepare documents that they’ll need to secure capital. (See sidebar on page 46.)
Together, that results in an ecosystem designed to help businesses access funds needed to grow—whether that’s a $5,000 loan or a $500 million loan, experts say.
“Improving the access to capital is crucial for fostering entrepreneurship and job creation,” says Michael Swack, professor at UNH’s Carsey School of Public Policy and the Peter T. Paul College of Business and Economics, and senior fellow at the university’s Center for Impact Finance.
And those resources could prove critical moving forward in this uncertain economy. The January 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices from the Federal Reserve System shows banks are instituting tighter lending standards on commercial and industrial loans to firms of all sizes.
A Public-Private Partnership
A local bank is still a starting point for any business looking for a loan—usually one they already have a relationship with for their business banking needs.
“You want your banker to be able to make decisions as close to you as possible,” says Dan Osetek, senior vice president and senior commercial lending officer with Meredith Village Savings Bank. “We work and live in the same communities, so we know what’s going on. We’re able to make local decisions, [and] that generally will help the business.”
Banks are instrumental for capital access: Last year Meredith Village Savings Bank closed 126 business loans, totaling about $37 million. And yet, federal regulations and a bank’s underwriting policies dictate loan requirements that are sometimes difficult for small businesses to meet.
“The common barriers are always there,” says Swack. “Limited credit history, insufficient collateral, not long business histories.”
That’s where public-private partnership comes into play. The U.S. Small Business Administration and the NH Business Finance Authority both have programs through local lenders to offer collateral or loan guarantees in order to make it “easier for us to extend those loans,” Osetek says.
For example, SBA express loans (officially called 7a loans) are a popular lending product that allows a bank to recoup up to 50% of their losses if a business defaults on their loan, Osetek says. The SBA also offers 504 loans, long-term fixed-rate loans of up to $5 million, and microloans of up to $50,000, according to Amy Bassett, district director of the NH SBA office. Last fiscal year, the SBA in NH processed 679 loans, totaling $162.2 million. This year, “the NH district office is on pace to exceed loan volume from the previous year,” Bassett says.
The NH Business Finance Authority (BFA) is a quasi-state organization that was created by the Legislature, and plays a similar role at the state level, says Executive Director James Key-Wallace. “Our programs help banks make loans to companies they know are good companies, know are good borrowers, but there’s some type of small obstacle to the process,” Key-Wallace says. “The bank can take on a little more risk than they would normally be able to.”
The BFA’s most popular offering is the Capital Access Program (CAP), which is available to businesses seeking loans of $500,000 or less. Through the program, banks set aside a certain percentage of each CAP loan in an account, and the finance authority puts in $2 for each $1 the bank contributes. If the bank has a loss on a CAP loan, it can reimburse itself from its CAP fund.
The finance authority also offers a loan participation program, under which the finance authority and a local bank each provide half of the loan. This reduces risk for the bank, since the bank is paid before the finance authority if the loan defaults. The program also benefits business owners, since the finance authority offers 0% interest for the first year on its funds, and half the bank’s interest rate for the second year. (The bank charges its usual interest rate.)
“That gives the borrower time to grow into whatever their plan is,” Key-Wallace says, noting this program is used for large loans as well as small and local established NH businesses. “They can move into a new place, or get new equipment running before the full monthly payment kicks in.”
Business owners working with local banks can often use both SBA and BFA resources. They should start by talking with bank lenders, who can suggest programs that might be a fit. “It’s common to see multiple loans to the same borrower, where the [finance authority] is helping with the part we can help with, and the SBA is helping with the part they can help with,” Key-Wallace says.
Beyond Banks
Sometimes, even with SBA or BFA loan programs, a business isn’t able to qualify for traditional lending. In that case, Osetek refers businesses to the mentorship program SCORE or to the Small Business Development Center (SBDC) for guidance.
“We help small businesses navigate that commercial lending landscape,” says Ed Miles, NH SBDC’s Seacoast regional director. Part of that is helping business owners understand they may need to apply for loans at multiple banks—applying to three or more isn’t uncommon, he says. “Don’t be discouraged if you’re getting a no,” Miles says. “You just don’t fit the current risk portfolio of the bank.”
Even with a solid business plan and financial projections, some businesses won’t quality for bank capital. However, they can explore alternative lending.
Many areas and counties in NH have regional development corporations, which provide funding with the goal of stimulating the local economy. These can be an important resource, especially for early-stage companies, Key-Wallace says.
The big player in the alternative lending space is the NH Community Loan Fund, which helped Sunfox Farm buy their food truck. “We focus on the loans that maybe fit just outside local banks’ parameters, and we figure out how we can make them bankable,” says Steve Saltzman, president and CEO of the loan fund.
The loan fund has many programs, including providing a secondary loan to address collateral concerns and extending loans directly to borrowers. All programs at the loan fund come with mentorship and business coaching, which contributes to the loan funds’ low default rate: just over 1%.
Lending Amid Uncertainty
Lenders and borrowers alike are watching closely to see how economic uncertainties and changes to federal funding will impact the commercial lending market in NH.
So far, “banks are still lending money,” Miles says. Osetek confirms that, saying that demand for business loans at Meredith Village Savings Bank “is the strongest it’s been in the past 24 months, without a doubt.”
And yet, “there’s definitely some uncertainty on the horizon and businesses are starting to show some signs of weaker financial performance,” Osetek adds. “We’re trying to see if there are any signs of weakness [in the economy] and … what sort of specific impact the macro picture is going to have on specific industries or our corner of New Hampshire,”
he says.
Businesses aren’t the only ones affected: Lenders are also looking more closely at nonprofit borrowers who rely on federal grant funding, Key-Wallace says. In March, the SBA announced it would be laying off 43% of its staff. “The SBA is modifying its lending program to ensure that lenders are confident in their use of the programs,” Bassett says.
Also in March, President Trump issued an executive order to cut back the federal Community Development Financial Institutions Fund, which assists community loan funds nationwide. That may eventually have a trickle-down effect on regional community development organizations in NH, Swack says.
However, there’s plenty of hope for borrowers: Both the NH Community Loan Fund and the NH BFA say they’re relatively insulated from changes to federal policies. The finance authority is self-funded and doesn’t rely on federal grants. “We’re very New Hampshire in how we operate,” Key-Wallace says.
The loan fund is made up of investments from 600 individuals and organizations and only relies on a “small” amount of government funding, Saltzman says. “For us as an organization, there’s no material impact” from federal funding changes, he says. “But we think it’s important that we continue to show up [for] the borrower who may be impacted by living in such a dynamic time, so they can thrive, and be the backbone of our communities.”
