The SBA ranked all U.S. banks according to small-business lending practices in a recent study.
Douglas County Bank was named in the top 10 percent of "small-business friendly" Kansas banks.
The survey, conducted by the U.S. Small Business Administration's office of advocacy, rates 450 state banks according to their performance in small-business lending, which is defined as loans of less than $250,000.
Banks are ranked on how they compare with other banks in the state. If a bank scores 10 points in all five of the criteria areas, the cumulative score is 50 -- which is the perfect score for a "small-business friendly" bank. A bank with no small-business loans in its portfolio will score zero.
Douglas County Bank received a score of 42.
"Relative to the other banks in the state, they (Douglas County Bank) are doing a dynamite job," said Don Colcun, regional advocate for the SBA in Kansas City, Mo. "This is just the kind of banks we love."
Douglas County Bank President Bob Georgeson said the bank seeks to offer customers a complete package of credit; however, it focuses on small-business lending.
"This is our niche. This is what Douglas County Bank does the best," Georgeson said. "This is what we have said we can do better than the competition."
Other banks that are chartered in Lawrence scored as follows: Mercantile Bank of Lawrence, 37; Commerce Bank, 28; University National Bank, 27.
Jerry Samp, president of Commerce Bank, said that before Commerce purchased the bank in 1994, almost all of the loans were car and home loans. Since the takeover, the bank has tried to emphasize commercial loans, especially small, community businesses, Samp said.
"We've been very active in that area, considering we were starting from zero," he said.
Samp said small-business loans are "vitally important. When we make small-business loans, we're expanding our own customers."
Samp said it's difficult to compete with Douglas County's longtime presence in the area, but Commerce is working to combat the big bank image.
"We try to bring big bank money techniques for our small community businesses."
The survey, "Small Business Lending in the United States, 1995 Edition," is the third year of the nationwide advocacy study. Colcun said this is the first year the survey was given broad distribution.
The project has two objectives, Colcun said: to provide information to increase competition among lenders and to give small businesses information about where to shop for credit. The SBA received many requests for the data published in the 1994 report, he said.
"If banks recognize that their lending behavior is being monitored by advocates of small business, their lending attitudes may change," the report said.
National statistics show that two-thirds of all small businesses that borrow get their funds from commercial banks, while only 14 percent borrow from family and friends.
Small-business loans were 20 percent of total bank loans in 1995. Small-business loans increased from 1994 to 1995 by 5.4 percent, or $8.3 billion.
All of the 44 banks in Kansas that achieved scores of 41 or higher have total assets of $300 million or less, Colcun said, proving that small community banks are crucial to small business start-ups.
The information for the study was gathered from lending institutions' call reports, which are required by Congress and open to the public.
Local bank lending statistics
The U.S. Small Business Administration offered the following statistics for 1995. According to the SBA, small-business loans are commercial loans below $250,000.
Douglas County Bank reported 575 small-business loans totaling $10.7 million.
Mercantile Bank of Lawrence had 588 small-business loans totaling $14.9 million
Commerce Bank had 184 small-business loans totaling $2.8 million.
University National Bank had 70 small-business loans totaling $1.5 million.