Fewer businesses seek loans, Wisconsin bank CEOs say

Demand for business loans is weak  throughout Wisconsin and is expected to stay that way through the first six months of the New Year, according to the latest Wisconsin Bank CEO Economic Conditions Survey. On the bright side, bank leaders predict that interest rates will remain low during the first half of 2010 and fewer think the Wisconsin economy is still weakening compared to their responses six months ago.

Eighty-eight percent of the 118 bank CEOs who completed the biannual survey, conducted by the Wisconsin Bankers Association, rated current demand for business loans in the market(s) they serve as “fair” (40.8 percent) or “poor” (47.8 percent). Just 11 percent said demand is “good” and no one completing the survey rated demand as “excellent.”

When asked to predict business loan demand for the first six months of 2010, 69 percent said it would stay the same, 21 percent said demand would rise and 9.6 percent said it would drop. The three biggest obstacles to business lending, bankers say, are low demand, regulatory pressure on banks and fewer qualified borrowers.

Wisconsin bankers are clearly frustrated by the mixed messages they are getting from different arms of government, explains Kurt R. Bauer, WBA president/CEO.

“On the one hand, you have elected officials scolding banks for not lending enough,” he says. “On the other, you have regulators threatening costly penalties if banks make anything but the safest loans.”

Bauer speculated that much of the populist rhetoric coming from elected officials was intended to deflect attention and blame for high unemployment and a slow economic recovery away from politicians.

Although demand for residential mortgage loans is flat as well, nearly 60 percent of bank CEOs say the extension of the $8,000 first time homebuyer tax credit and the new $6,500 tax credit for existing homeowners will stimulate home sales in the first half of the year. The same percentage also believes that long-term interest rates will stay low during the same period.

While 95.6 percent of the survey participants rate the current health of the overall Wisconsin economy as either “fair” (69.8 percent) or “poor” (27.8 percent), the number of bank CEOs who believe the economy is still weakening dropped from 70 percent six months ago to 59 percent today. Just 4 percent rated the Wisconsin economy as “good” and none rated it as “excellent.”

New center to help state’s specialty meat producers

With the creation of the Specialty Meat Development Center, Wisconsin becomes the first state in the nation to form a non-profit business resource center dedicated to helping artisan sausage and cured meat makers operating in the state of Wisconsin grow their businesses. The center, formed by a partnership between the Wisconsin Department of Agriculture, Trade and Consumer Protection and the meat-processing industry, will support the state’s specialty meat processors in five key categories: Business development, product development, labeling and packaging, market development and food safety and quality.

“The Specialty Meat Development Center is dedicated to growing Wisconsin’s state-inspected meat facilities by providing them with business resources and alliances they might not have the resources to obtain on their own,” says Rod Nilsestuen, secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection. “The center will help businesses search out new outlets in which to offer their products, develop new cured and specialty meat products, and provide training and market development support to meat processors striving to improve their businesses and increase sales.”

Wisconsin has more state-inspected meat facilities than any other state in the country, with 289 official state-inspected meat-processing facilities and 65 custom slaughter plants operating within its borders. It is estimated these facilities produced more than 77 million pounds of meat and meat products bearing the state-inspected stamp. The total impact of the state’s meat industry to the Wisconsin economy is $12.3 billion, accounting for more than 19,400 jobs throughout the state. Any Wisconsin meat-processing facility may apply for assistance from the Specialty Meat Development Center.

“Approximately 95 percent of Wisconsin’s state-inspected plants have fewer than 25 employees and thus have little-to-no capacity to tackle growing their businesses,” says Bob Andorfer, president of the Specialty Meat Development Center. “Our goal is to help these processors take their businesses to the next level while ensuring Wisconsin’s meat products are always the highest quality available.”

A key initiative of the Specialty Meat Development Center is the creation of a two-year Master Meat Crafter Training Program, the first of its kind in the country. The program, affiliated with the University of Wisconsin-Madison, is currently in development and will include a Master Meat Crafter seal that graduates can place on their packaging labels to help signify a higher-quality product. The Master Meat Crafter Training Program will launch in spring 2010; the first class will consist of 35 meat processors and is only open to Wisconsin meat processors through an application process. Applicants must meet specific criteria as part of the selection process and are encouraged to learn more about the program by emailing Dr. Jeff Sindelar at jsindelar@wisc.edu.

MOVERS

>> Mayville Engineering Company Inc. has added Patrick D. Michels to its Board of Directors. Michels is the President of Michels Corp. headquartered in Brownsville.

BUSINESS BRIEFS

WISCONSIN RAPIDS: Aspirus Inc. has finalized the purchase of 6.2 acres of land at the corner of Highway 54 and Peach Street where a new $12 million, 57,000-square-foot Aspirus Doctors Clinic will be built. The new facility will have the latest technology, improve patient flow and create space for additional providers. As new physicians are recruited, the Aspirus Doctors Clinic will grow from 25 doctors to a 30-physician, multi-specialty group practice with additional visiting specialists from Wausau. In all, the new, larger facility will create a minimum of 15 to 20 new jobs. Construction is expected to begin spring 2010, and is targeted for completion in about a year.

MILWAUKEE: Recipients of Professional Dimensions’ 2010 Sacagawea Awards are Mary Lou Ballweg, president and executive director of the Endometriosis Association, and Jacquelyn Fredrick, president and chief executive officer of the BloodCenter of Wisconsin. The Professional Dimensions award is named for Sacagawea, the only woman on the Lewis & Clark expedition. A woman of many dimensions, Sacagawea was a trailblazer who distinguished herself throughout her life by her leadership, intelligence, foresight, common sense and adaptability. The 2010 honorees exemplify these qualities, according to the association.