small-business loans have been reflecting a positive direction for the economy over the last year. The Small Business Administration (SBA) has reported its FY19 lending numbers, claiming that they provided more than $28 billion to businesses who may not have found access to much-needed capital anywhere else.
Acting SBA Administrator Chris Pilkerton noted that, “A strong economy is powering America’s 30 million small businesses, and the SBA’s FY19 numbers bear that out. Our 504 and Microloan programs continued to grow from last year.” These popular programs help build all manner of small businesses around the United States.
The administration says that its frontrunner 7(a) plan created around 52,000 7(a) loans worth $23.17 billion altogether over the course of FY19. These loans provide financial assistance to small businesses to acquire land, purchase equipment, or increase working capital.
William Manger, associate administrator for the SBA’s Office of Capital Access, noted that “…we know that 7(a) lenders are making loans conventionally without the SBA guarantee,” and remarked that lenders were benefiting from a healthy market environment.
Numbers for the SBA’s 504 loans also remained strong, with over 6,000 loans for $4.9 billion. This growth, Manger noted, was due to an increase in long-term lending and smaller fixed interest rates.
The CDC (Certified Development Companies) /504 loan program is designed to give funds for procurement of fixed assets to eligible businesses. The program uses fixed-rate financing to promote market growth. With the assistance of its third-party banking partners, the SBA uses CDCs to provide financing to small businesses. Though $5 million is the usual loan limit, there are exceptions for energy-efficient or manufacturing projects that qualify for up to $5.5 million.
In addition, the Associate Administrator was pleased that FY19 set a new record for the SBA Microloan program, with lending for qualifying businesses by rising 7.5%. The Microloan program gives loans to nonprofit-lending intermediaries, who in turn lend up to $50,000 to small businesses who agree to their conditions. $81.5 million was provided through approximately 5,500 loans at the end of FY19.
The SBA is also innovating and improving processes through technologies such as its Lender Match platform, which helps business owners find a lender with SBA qualifications in less than two days. Lender Match has created 4.4 million leads for businesses looking for loan options, with more than 230,000 individual borrowers having discovered lenders with flexible financing options.
In addition, the SBA has expanded it’s HUBZone program for small business in economically distressed areas of Colorado. Learn more here.
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