SBA Loan Volume at All-Time High
Network Solutions reported that the US Small Business Administration announced a record volume of loans in fiscal year 2011. This volume is the highest in its history. The first quarter of 2011 was also the most active single quarter ever for SBA-backed loans with over $12 billion. This is more than double any quarter in the past four years.
SBA Administrator Karen Mills said the loan growth continued a trend started in 2009 and that SBA-backed lending has reached pre-recession levels.
“SBA-backed lending continued the upward trend we saw last year,” Mills said in announcing the total loan volume of over $30 billion.
In fiscal year 2011, which ended September 30, the SBA approved $30.5 billion (61,689 loans) to small businesses and startups through its two largest loan programs.
Mills says loan enhancements created under theJobs Act, which allowed the SBA to raise the guarantee on its 7(a) loans to 90 percent and waive fees on both its 7(a) and 504 loans, helped contribute to the growth in lending.
Despite the overall good news, the SBA says, there are still some gaps in the marketplace and small businesses that need access to capital. To help fill these gaps, in 2011 SBA created two new lending programs: Community Advantage and Small Loan Advantage.
Both Advantage lending programs provide streamlined applications for loans under $250,000 with the standard 7(a) guarantee. The goal is to encourage lenders to make loans for smaller dollar amounts; these loans often go to underserved communities. In addition, Community Advantage makes it easier for small businesses to find loans in their communities by allowing “mission focused” lenders, such as Community Development Financing Institutions (CDFIs) and microlenders to make 7(a) loans. The SBA added 30 new lenders to the 7(a) lending program through the Community Advantage program in FY 2011.
Photo by Robby Virus