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SBA Says Small Business Lending Reflects Strong Economic Trends

What's Hot in Small Business – Chris Crum
Chris Crum Chris Crum writes for Small Business Resources about what's new for small business. Chris was a featured writer with the iEntry Network of B2B Publications where hundreds of publications linked to his articles including the Wall Street Journal, USA Today, LA Times and the New York Times.

SBA Says Small Business Lending Reflects Strong Economic Trends

SBA Says Small Business Lending Reflects Strong Economic Trends

Small business lending has been reflecting strong economic trends, according to the United States Small Business Administration (SBA), which recently announced its FY19 lending numbers. These numbers show that the SBA guaranteed over $28 billion to entrepreneurs who otherwise would not have had access to capital to start, grow, or expand their business.

Acting SBA Administrator Chris Pilkerton commented, “A strong economy is powering America’s 30 million small businesses, and the SBA’s FY19 numbers bear that out. When the economy is doing well, 7(a) lenders are more willing to provide capital without the need for a federal loan guarantee. Our 504 and Microloan programs continued to grow from last year, as all of these loans are designed to create jobs and grow all small businesses in communities across the country.  We continue to be proud that the SBA is here to help America start, grow, and expand opportunities for entrepreneurs."


Chris Pilkerton, Acting Administrator, SBA (Image via SBA.gov)

The Administration says that during the FY19 period, its flagship 7(a) loan program made approximately 52,000 7(a) loans totaling $23.17 billion. These loans provide financial assistance to small businesses looking to acquire land, purchase equipment, or increase working capital.

William Manger, Associate Administrator for the SBA’s Office of Capital Access, said, “With a strong economy and historically solid small business optimism, we know that 7(a) lenders are making loans conventionally without the SBA guarantee."

The SBA’s 504 loan program also grew, with over 6,000 loans made for a total of $4.9 billion during the period. This growth, Manger noted, was due to the longer term and low fixed interest rate that the product provides to small businesses.


William Manger, Associate Administrator, Office of Capital Access, SBA (Image via SBA.gov)

The 504 program, or CDC (Certified Development Companies)/504 loan program, provides capital to small businesses specifically for the acquisition of fixed assets. It is designed to promote economic development through fixed-rate financing. The SBA authorizes CDCs to provide financing to small businesses with the help of third-party lenders (banks). The maximum loan amount is $5 million, though there are exceptions for energy-efficient or manufacturing projects that qualify for up to $5.5 million.

Manger also said he is proud that the SBA’s Microloan program had a record year with a close to 7.5 percent increase in small business lending. The Microloan program provides loans to nonprofit lending intermediaries that make loans of up to $50,000 to small businesses on "reasonable terms." During FY19, 5,500 of these loans, totaling $81.5 million, were provided.

The Administration points out that, in addition to lending, it is also innovating and improving processes. It is doing so through technologies, such as its Lender Match platform, which lets entrepreneurs fill out an online form and connect with an SBA-approved lender within two days. The SBA says the platform has generated 4.4 million leads on behalf of small businesses to lenders. Lenders have contacted over 230,000 unique borrowers with financing options.

The SBA’s impressive lending numbers are an indication of a thriving economy through the end of September (the conclusion of the SBA’s fiscal year), and suggest significant growth for many businesses in the U.S.


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