SBA Loans Hit Record Volume for 2011

By Maria Valdez Haubrich

The U.S. Small Business Administration (SBA) has concluded its 2011 fiscal year with the highest loan volume ever in the agency’s history. 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. “Due to the Small Business Jobs Act … over 61,000 small businesses had access to capital.”

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. The continues the growth from $22.6 billion (60,771 loans) in FY 2010 and $17.9 billion (50,830 loans) in FY2009. Th total for 2011 included approximately $5.8 billion in loans to more than 16,000 startups, the most since FY2008.

The first quarter of 2011, at over $12 billion, was the most active single quarter ever for SBA-backed loans, with more than four times the dollar volume of the same quarter in 2009 – the first three months of the recession – and more than double the volume of any quarter over the past four years.

Mills says loan enhancements created under the Small Business Jobs 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.

Image by Flickr user TexasGOPVote (Creative Commons)

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