Multiple industries drive business expansion financing throughout Alaska.

• Author: Barbour, Tracy
• Position: FINANCIAL SERVICES

Castable Ceramics owner Sean Siegel practically grew up with Northrim Bank. So when he wanted to expand the full-service dental lab, he didn't hesitate to reach out to loan officer Kelly McCormick. He wanted financing to purchase the building next to his Minnesota Drive location in Anchorage. Ultimately, Siegel received a $970,000 loan with a twenty-year term and just 10 percent down--thanks to the guarantee of the Small Business Administration (SBA).

Siegel says he feels lucky to have Northrim's backing for the family business, which has been fabricating crowns, dentures, and other restorations since 1986. "Our responsibility is to facilitate the needs of Alaska dentists, making sure their valued patients have the opportunity to have dental restorations made right here in the state of Alaska," he says. "Northrim's assistance for what we do is rather far-reaching." Currently, Siegel is in the process of renovating the building, which should be completed by May. "Anybody can have a building, but it takes some detail and planning to make it a dental laboratory," he says.

The new location will extend Castable Ceramics' footprint from 2,400 to 7,400 square feet. The lab will occupy 3,200 square feet of that space and lease the rest to other businesses.

Optimism Fueling Expansion Financing

Alaska's financial institutions say they're seeing steady loan volumes, including expansion financing similar to Castable Ceramics' recent purchase. Borrowers are using longer-term funding to acquire new businesses, construct new facilities, refinance/restructure debt, and buy vehicles and equipment. Customers are also capitalizing on credit lines for inventory, payroll, and other short-term expenses. Key areas for expansion financing are in the resource, healthcare, tourism, and professional industries, with loans often being guaranteed by the SBA and the Alaska Industrial Development and Export Authority.

KeyBank's Alaska President Brian Nerland says consumer confidence is up nationwide as well as in Anchorage. At least that's the conclusion of the Anchorage Consumer Optimism Index recently released by the Anchorage Economic Development Corporation. The report--sponsored by KeyBank and produced by Northern Economics on behalf of the Anchorage Economic Development Corporation--uses data from a random quarterly sample of at least 350 households in the Municipality of Anchorage. "It shows that people feel good about the economy and fairly good about the future," Nerland says.

Wells Fargo's Anchorage Business Banking Manager Bond Stewart has also noticed a surge in consumer optimism and strong loan volumes. "There's a pretty stable and vibrant economic environment now," he says. "The low interest rate environment has been fantastic if you're a borrower."

Politics have also had a clear impact on the current levels of expansion financing, says Brendyn Shiflea of First National Bank Alaska. Specifically, the...