Business Services News

Update 2023: what we’re seeing in the region now

After the crushing blow of 2020 shutdowns and general uncertainty, many business owners found 2021 into 2022 to be positive for cash flow.

As 2023 gets underway, increased costs and logistics are providing some challenges. The spirit of growth, however, is alive and well. People all across the northeast Minnesota are still wanting to start, purchase, or expand businesses. Deal flow has been steady.

“The entrepreneurial ecosystem remains strong. The pandemic was hard on most small businesses, but it also nudged a lot of folks to make the leap into business ownership,” said Northland Foundation President, Tony Sertich.

Working capital and construction-related financing are a heavy focus at the moment, from mature businesses investing into their operations, to small start-ups just getting going, to ownership transitions.

“It’s encouraging to see that, despite rate increases by the Fed, a growth mindset continues in the region.”

Tony Sertich, President

Michael Colclough, who’s led the Northland Foundation’s lending program for over seven years, touts northeast Minnesota’s concentration of financing and economic development organizations as a major asset for entrepreneurs trying to sustain their businesses in lean times or manage growth in boom times.

“We have a solid network – banks and credit unions, the ARDC, Northspan, Entrepreneur Fund, Northland SBDC, and others – with a common goal to help businesses get the support they need be successful,” stated Colclough.

As a non-traditional lender and certified Community Development Financial Institution, we add to the mix with:

• Responsive lending staff able to turn approvals around relatively quickly without a lot of red tape.
• Less restrictive loan policy around collateral or other typical lending requirements.
• Flexibility and cost-consciousness in a time of rising interest rates.
• Willingness to fill gaps, for example, with construction or equipment cost over-runs Northland might step in to extend additional credit and keep projects ticking.

“Being a small and nimble shop, with the ability to take a second position, for example, or be looser about collateral, makes us a good option anytime,” Colclough added. “Our role is arguably most valuable when economic conditions are more challenging.”