Tri County Business Journal Lake County, Ohio OH www.tricountybusinessjournal.com



	According to the U.S. Treasury report, the nation's biggest banks from April to September 2009 cut their small business loan balances by $10.5 billion.

by Peter Strozniak

By now, you’ve heard two sides of this story: Banks aren’t loaning money to small businesses.
Banks are loaning money to small businesses.

So what’s really happening?

“Banks are loaning money. Our loan volume is up 48 percent from a year ago,” says Gilbert B. Goldberg, director of the U.S. Small Business Administration (SBA) in Cleveland. “But there are small businesse that are having difficulty accessing capital because there still is a lot of distress in the marketplace.”

Because of the recent recession and the slow economic recovery, most big banks have significantly tightened their loan and credit standards, making it harder for small companies to secure new financing. That’s forcing business owners to search for new financial resources. Some are finding them at small banks and credit unions.

According to a U.S. Treasury report, the nation’s biggest banks from April to September 2009 cut their small-business loan balances by $10.5 billion. Additionally, government guaranteed loans made through the Cleveland’s SBA office plunged 40 percent, from $25.3 million in 2006 to $15.1 million, according to a report released in February by Democratic U.S. Senate candidate Lee Fisher. Political and community leaders have criticized big banks for shutting off the credit line spigot when struggling small businesses need to borrow money to make it through a challenging economy.

Going small

Though the lame economy has affected banks of all sizes, small community banks and credit unions seem to be attracting small-business clients and increasing business lending.

Nearly half of small community banks in the nation saw an increase in new business customers in the third and fourth quarters of 2008, according to a survey of small banks by the Independent Community Bankers of America, a trade group in Washington. What’s more, business loans made by credit unions rose from 4.7 percent in 2006 to 5.7 percent in 2008, reports the Credit Union National Association of Madison, Wis.

“Every day we’re getting calls from small-business owners.” says Dell Duncan, president and CEO of Ohio Commerce Bank in Beachwood. “Increasingly, business owners are looking for a banking relationship because some have been asked to leave a relationship with their big bank. Others are just not comfortable with their big bank relationship because they don’t know whether the bank is going to be there for them anymore.”

‘Very active lending’

By dollar volume, Ohio Commerce Bank ranks fourth for providing SBA guaranteed loan approvals to small companies. As of Jan. 31, the bank loaned $3.8 million in the previous four months. That’s more than what big banks like KeyBank, PNC (formerly National City), Fifth Third Bank and Charter One loaned to small companies via the SBA loan program, according to data from Cleveland’s SBA office. “We have been very active lending to small businesses, which is our primary focus,” Duncan says. “The consumer banking that we do is with the owners and the officers of the companies that bank with us. We have all of the services that the large banks have, but we can provide them less expensively.”

Although it opened for business just three years ago, Ohio Commerce Bank already posts assets of $70 million with a loan portfolio of $56 million.

“For our size, we do pretty well,” Duncan says. “In many cases, we get small-business owners we can’t help because they’ve lost money for the past two years or they are trying to reinvent themselves.”

Even though many big banks have slowed down lending and credit lines, some are planning to lend big bucks to small-company owners.

Committing billions

For example, Huntington Bank, a large regional financial services company that operates 600 offices in six states, including 51 branches in Northeast Ohio, recently announced it plans to lend $4 billion to small companies over the next three years. In addition, Huntington agreed to a three-year partnership with the state to provide $1 billion to small businesses.

“It’s clear that healthy small businesses foster growth and vitality in the communities they serve,” says Steve Steinour, president and CEO of Huntington Bank. “We view this commitment as a significant opportunity at this stage of the overall economic recovery.” The Columbus-based bank also is hiring 150 additional business bankers.

Loans increasing

Last year’s passage of the American Recovery and Reinvestment Act brought changes to SBA’s loan programs, enabling banks to offer more loans and other financial products to small companies.

“A year ago, we were doing about 40 to 60 loans a month,” Goldberg says. “Once the recovery bill kicked into full swing by May, loans increased to 80 to 100 loans a month, which we are still doing today. Every once in a while, we’ll hit 105 to 120 loans a month, and that is very significant.”

As the economy improves, Goldberg expects SBA loans to pick up to about 150 loans per month.

“I think that will happen when the growth in our Gross Domestic Product flows downstream to our small businesses on Main Street,” he says. “That will happen because it is part of the business cycle.”

Peter Strozniak is a contributing editor for Tri County Business Journal who reports on banking/finance, manufacturing and technology. He can be reached at Peter55@xemaps.com.

Spice up retirement
Owners of Lyndhurst restaurant make heartfelt return to the kitchen to keep restaurant successful

by Maria Shine Stewart



	The aroma of baking bread, tasty spices and hard work comes from Dino's kitchen on a daily basis. Photo by Todd Nighswonger.

"People who cook and don’t use their hearts will never be good chefs,” declares Dino DiFranco, owner of Dino’s Place Family Ristorante in Lyndhurst.

Dino should know. He has been in the business for years and even retired. That didn’t last long.

Just like good bread dough, a solid business can be flattened for a while, but with the right ingredients, it will bounce right back. “Food is great here,” boasts the simple window sign. To regular customers like Karen Zoller, that is an understatement.

“Everybody I’ve taken to Dino’s has liked it,” Zoller says. “They use olive oil and authentic ingredients. The pizza is good; the crust is just right. The pasta is excellent, and the specials are kind of unusual.They have a steady following and attract people from all over. They do a lot of interesting things with fish, too.”

Dino’s sauce, simmered with fresh vegetables and herbs — some grown in his garden — is legendary. Some products are from Italy. This blend of here and there, and then and now, is part of the restaurant’s success.

It’s not just the food. “Is Dino here?” echoes through the restaurant at any given moment. Eat-in or carry out, customers want to see him.

“A restaurant is like a family. The mother or the father has to be around,” Dino says.

“We love our customers,” Dino’s wife, Michelle, says.

Couple retires, returns

The couple passed the torch of their restaurant on Mayfield Road to new owners when they retired in 1998. The DiFrancos had put their four children through college by working in the restaurant. It was time for a break.

When they learned, after seven years, that their once-thriving restaurant was failing, Dino and Michelle bought it back. “My name was still above the door,” Dino says of wanting to salvage his reputation and name. “I had a beautiful clientele. It hurt my heart when I had to sell.” Dino’s career path has been steady, and he is a quick study. “I am a person who ‘sees it and gets it,’” he explains. He can weld, do construction, paint and lay carpet. Of course, he can cook, as could his four brothers and five sisters. His mother’s talents in Italy were legendary.

“How you do make food taste so good?” he recalls asking his mother. Her answer? A smile and a shrug.

Dino’s background



	Dino and Michelle's love story began many years ago, marrying in 1968 and opening Dino's in 1984. Photo by Todd Nighswonger.

A picture of Dino’s native Mont Alto (“high mountain”) in Italy graces the center of a baker’s rack in the restaurant. Comandino “Dino” DiFranco was born in 1939, named after a friend of his father’s.

Dino moved from Italy to Argentina as a young man in 1957 to seek work. He became a welder and made knives, forks and spoons, among other things. He emigrated to the United States in 1971 when Argentina’s political climate became tense.

The adaptable Dino first did restaurant work on the side while working at an apartment complex, partnered with a friend in Erie and then ran a bar in South Euclid in the early 1980s. He and Michelle opened their restaurant in 1984. Admittedly, “the first two years were rough,” he said. The third year, “things took off.”

Inviting atmosphere

Forest green and maroon vinyl tablecloths wipe down easily when enthusiastic kids slurp spaghetti. A gold wall mural with green vines extends through the restaurant, suggesting the outdoors.

As nice as this design may be – courtesy of Dino’s owners after the DiFrancos first sold the restaurant – at least one former customer has lamented that she misses “the diner that was here before.” Stools used to surround an open food bar that allowed customers to watch Dino cooking.

“He loved to cook and talk to the people,” Michelle chimes in, rushing to the kitchen.

Now, to see him at work, one must go behind the scenes. A pile of golden polenta waits on a spotless counter. The aroma of baking bread steams from a large oven. Vats of homemade cavatelli cool.

Once, Dino decided to speed up things so he could join his wife for a trip back to Argentina. He used “a little machine” to make 100 pounds of cavatelli in two hours.

Dino and Michelle

His beloved Michelle, originally from Rionero, Italy, but also an emigree to Argentina, first crossed his path when she was 12. Three years later, he asked her out. In 1968, they married.

With strains of “Santa Lucia” playing in the background, this love story sounds too romantic to be true. Michelle still has dark, curling hair and smooth skin. Dino’s blue-grey eyes sparkle.

How do they stay so young? “Maybe it’s the pasta,” Michelle says with a laugh.

Pictures of grandchildren hang in the kitchen. One toddler sits in a scraped-out watermelon, with peppers, tomatoes, oranges, lemons and apples tumbling in the foreground. Another giggles in a vat of spaghetti.

Personal touch

Waitress Nicole Herrara has been with Dino’s for about 5 1/2 years, not including travel abroad. “Dino’s is a lot more personal than a corporately owned restaurant,” she says. “As a waitress, you play a bigger part.”

Because customers are regulars, she can suggest what they might like to order, a personal touch in impersonal times.

In an economy in which some storefronts dim like distant stars in the night sky, others still dazzle. Dino acknowledges that regulars may not be as frequent, but he still sees familiar faces.

“People can be very stressed,” Dino says. A priest once told him that it’s not just what we eat, it’s who we eat it with that affects our well-being. If that’s the case, Dino’s just might be good for you.

Maria Shine Stewart is a South Euclid-based teacher, writer and writing consultant.Shine Stewart covers Mayfield Heights, Lyndhurst, South Euclid, Beachwood, Pepper Pike and Highland Hills for the business journal.