Small loans power SBA to big year for small business lending

The Card

Source: ~ Author: Kent Hoover

The Small Business Administration approved nearly $19.2 billion in 7(a) loans in fiscal 2014, the second-largest total in the history of this government-guaranteed loan program for small businesses.

This total was topped only by 2011’s $19.6 billion, when lending was boosted by fee waivers and higher guarantees adopted as part of the economic stimulus package.

(The SBA called 2014’s numbers a record in its news release, but we’ll have to forgive them for being overenthusiastic.)

But any way you slice it, 2014 was a great year for the SBA’s flagship loan program. In dollars, 7(a) lending was up 7.4 percent over 2013. In number of loans, 2014’s total of 52,044 was up 12 percent.

Nearly 60 percent of these loans were for under $150,000. The number of loans of this size were up 23 percent in 2014, helped by the agency’s decision to eliminate fees on them.

The news wasn’t so good for the SBA’s 504 loan program, which is primarily used to finance owner-occupied commercial real state. The SBA approved only $4.2 billion of these loans, the lowest total since 2009. These loans peaked in 2012, when a temporary program allowing businesses to use 504 loans to refinance their existing commercial real estate mortgages was in effect.

The agency’s fiscal year ended Sept. 30.

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