BUSINESS LOAN BLOG

SBA Small Business Loan Programs Hit Record

October 29, 2010 | Business Loans, General

The Small Business Administration posted a record year for lending in South Dakota – again.

The state office recorded a record 72 loans for its 504 program – typically used for fixed assets such as land purchases or building projects – for the fiscal year ending Sept. 30.

The SBA also lent a record $77 million in 7(a) loans, typically used for working capital. While that total represented a record dollar amount, the agency’s 362 loans was the third-highest yearly total, according to SBA statistics.

Last fiscal year, the SBA also posted a record year in the dollar amount of 7(a) loans approved.

“South Dakota lenders helped small businesses take advantage of the higher loan guarantees and fees waivers,” SBA District Director John Brown II said about the 7(a) program. “Even in these challenging economic times, our small business loan volume increased by over 17 percent from the previous record loan dollar amount of just last year.”

The record year was pushed, in part, by the American Recovery and Reinvestment Act of 2009, which raised the guarantee percentage rate and eliminated fees for most SBA loan programs. The program recently was extended through Dec. 31 with the signing of the Small Business Jobs Act.

The Jobs Act also permanently increased 7(a) and 504 limits from $2 million to $5 million and will allow some small businesses to refinance owner-occupied commercial real estate mortgages and bad credit business loans into the 504 loan program.

Forty-five lenders participated in the SBA’s 7(a) program and 31 lenders participated in the 504 program.

Dakota Business Finance of Sioux Falls was the lead lender in the 504 program with 23 loans totaling $6.2 million. That’s an increase from 15 loans the previous year.

The company began offering loans in 2006, said Lynne Keller Forbes, executive director. The CDC also had two out-of-state loans for a year-end total of 25.

“I think the fee waivers helped some,” Keller Forbes said. “I also think banks are becoming more aware of the program and probably more comfortable working with us in the program.”

Since the new fiscal year started Oct. 1, Keller Forbes said they already have approved four business loans.

“I think it’s going to be a great year for us,” she said.

Tags: bad credit business loans, business loans, poor credit business loans, SBA loan, SBA Loan Programs