- Associated Press - Saturday, April 26, 2014

INDIANAPOLIS (AP) - The owners of gluten-free bakery Ceres’ Basket felt apprehensive when they arrived at a local bank branch seeking a loan to buy a building for a store in Carmel.

“We were 100 percent ready for a rejection,” said Virginia Fistrovich, who owns the business with Shana Kelso. “We really thought, when we sat down, they were going to laugh us out of there.”

They were wrong. Huntington Bank approved a $175,000 loan in March to help the women buy the property. They’re not alone.

More small businesses in Indiana are securing loans as owners learn to present their companies better and banks warm to small-business lending after years of hesitation. Indiana’s Office of Small Business and Entrepreneurship reported an explosion in financing in 2013 among clients of its consulting program.

Bank loans to the center’s clients more than tripled from the previous year, to almost $126 million, while its number of clients remained relatively steady, the state-run agency reported in late March.

A few companies secured multimillion-dollar loans, driving up lending numbers beyond what was seen elsewhere. But excluding major deals, the overall climate also appears to have swung upward in 2013, Jacob Schpok, the group’s executive director, told the Indianapolis Business Journal (http://bit.ly/1kL4hAg ).

Separately, the number of loans guaranteed by the U.S. Small Business Administration picked up slightly between October and March. But the total dollar amount, about $214 million, is down slightly because borrowers are shifting to a different program that issues smaller loans, the SBA’s Indiana office reported.

Banks around Indiana surveyed by IBJ reported more small-business customers in 2013 and higher loan amounts.

“Triple the growth_nothing like that,” Tim Massey, Indiana regional president for BMO Harris Bank, said, referring to the Office of Small Business and Entrepreneurship numbers. But “we definitely see the economy continuing to improve in the U.S. and Indiana.”

It is a changeup after several tough years for borrowers.

Major financial institutions largely turned away from lending to small businesses after the recession began in 2008, which left local and regional banks to pick up what they could.

Some smaller Indiana-headquartered banks, such as Muncie-based First Merchants Corp., bolstered their small-business lending to take advantage of the situation. In the past two years, First Merchants hired seven bankers to work with small companies, noted Michael Joyce, director of business banking.

“We felt like there is just a gap that is emerging,” Joyce said.

Then big banks started returning to smaller customers. Thirteen of the largest increased their lending to small businesses by $17 billion from 2011 to 2013, according to a September report from the Consumer Bankers Association.

Also, banks in 2013 began to relax their policies for business loans because of increasing competition for them, the Federal Reserve reported in February.

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