The Sunshine State continues to recover from the 2008 economic recession, which hit our housing market particularly hard. We can take a new tack and encourage continued upward movement by encouraging our government to adopt pro-growth policies that support our economy.
While we have made some economic improvements since 2008, more needs to be done to help Florida prosper: Forbes recently ranked our economy as 26th in the US. Even more troubling is the fact that Florida’s new business startup rate has been nearly flat since 2010 and remains below pre-recession levels. Small businesses are critical to Florida’s economic growth, not only helping to support jobs and important innovation, but also putting money back into our state through job growth and economic spending.
I realize the importance of small business success, as it is my mission to help businesses start, expand, and contribute to making the economy increasingly healthy. My company, Fountainhead Commercial Capital, works with small and midsized businesses to purchase or build their own commercial space through highly-competitive commercial real estate loans. For many businesses, especially those looking to increase their net worth, commercial real estate helps them become truly successful, yet most lack the means to make this a reality on their own.
This is where Fountainhead—and many regional banks—come into play.
Our bread and butter is Small Business Administration (SBA) loans, and our management team has helped to finance over $23.6 billion in loans for commercial projects for businesses across the country. Sometimes, we work with regional banks, which also focus on serving this important sector of the economy and do this type of lending. These institutions have more capital than a community bank, but retain close relationships with their communities.
However, even though they are less risky than their Wall Street counterparts due to the nature of their businesses, they are also subject to the same regulations, because they have more than $50 billion in assets. This is troubling, because risk is more than just size alone. Only targeting a bank’s size does not make the financial system safer or sounder. Even worse, by burdening institutions which focus primarily on serving Main Street with improperly calibrated regulations, it ends up reducing the capital available to lend. This contributes to the cycle of having a startup rate which has plateaued and an economy that is not growing enough. This is a significant reason why the post-Great Recession recovery has been so lukewarm -- banks staying on the sidelines due to uncertainty and/or concern about too stringent regulations.
Several years out of the Great Recession, it is time Congress reviews the current regulatory environment created by the Dodd-Frank Act and make changes to ensure our economy nationally, but also at a state level, can prosper. Dodd-Frank’s one-size-fits-all approach has ended up cutting off loans for businesses that would support jobs, inject money back into the economy, and invest in local vendors and services. By moving to a system that bases regulations on several factors -- such as size, complexity, global activity, and more -- we can ensure the financial system remains safe and sound while allowing for needed growth.
I am proud to work with business owners to bring their companies to the next level, but I want to ensure everyone has access to those same resources. Congress must act to tailor regulations so their growth can continue.
Chris Hurn is the founder and CEO of Fountainhead Commercial Capital based in Orlando, Florida.
