U.S. Small Business Administration: Hits lending record in fy 2014

7(a) Lending Opens Opportunities for America’s Small Businesses; Wisconsin Leads the Nation in 7(a) Small Loans

WASHINGTON – The U.S. Small Business Administration 7(a) Loan Program reached another lending record in FY 2014, announced today by SBA Administrator Maria Contreras-Sweet. By the end of the fiscal year (Sept. 30), SBA had approved 52,044 7(a) loans for $19.19 billion, an increase of 12 percent in number of loans and 7.4 percent in dollar amount over FY 2013.

Wisconsin’s 7(a) lending increased 5.6 percent from 1456 to 1537 loans. The Badger State also led the nation for the second year in the 7(a) Small Loan Program; 384 loans of $350,000 and under were made for $58.7 million, a 67 percent increase in numbers and a 54 percent increase in dollars over FY 2013. Wisconsin lenders also made more SBA loans to start-up businesses, from 501 in FY 2013 to 534 in FY2014—nearly one-third of all SBA loans made here. While total 7(a) dollars loaned dropped from $552.1 last year to $445 million this year, this reflects the growth in volume of smaller loans.

The 7(a) program is designed to provide small businesses with the most comprehensive type of financial assistance to cover the vast majority of business expenses, such as short and long-term working capital, exports, and refinancing existing debt under certain conditions.

“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,” said Contreras-Sweet. “Thanks to the hard work and outreach by our lending partners, SBA staff, and our resource partners, as well as the small business owners themselves, we have been able to put more capital into the hands of our nation’s entrepreneurs. We know that America’s small businesses pack the biggest punch, creating two out of every three net new private sector jobs in the U.S. These small businesses are the cornerstone of our communities, so their success and expansion is vital to the nation’s economic growth.”

SBA had been authorized $17.5 billion in the FY 2014 lending program. It became clear that lending would exceed that amount; therefore the agency secured an increase for the 7(a) program in the Continuing Resolution that was approved in mid-September.

Other SBA loans that did well in fiscal 2014 were those $150,000 and under. Spurred by the fee relief implemented at the beginning of the fiscal year (fees were set to zero), these loans saw an increase of 23 percent in number of loans (30,675) and 29 percent in approved dollars ($1.86 billion) over fiscal year 2013 (24,923 and $1.44 billion respectively). Wisconsin saw an even larger increase of nearly 30 percent in loan numbers (951 in FY 2014 from 734 in FY 2013) and a 40 percent increase in dollars ($63.9 million in FY2014 from $45.7 million in FY2013). Eight hundred fifteen Badger State borrowers received fee relief of $895 per loan for $730,000 in savings.

Fee relief was also instrumental in helping veteran small business owners through the Veteran Advantage initiative (zero fees on loans $150,000 to $350,000 to veterans.) Fee relief for veterans began January 1, 2014, and by the end of the fiscal year amounted to $610,000. Fee relief for both loans $150,000 and under, and for SBA Veterans Advantage, was extended through FY 2015.

Small businesses reflect the dynamic demographics of the United States. In FY 2014, the number of SBA loans to African Americans grew by roughly 36 percent over the previous year. For Hispanics and women, there was an increase of 14 percent for each group. Wisconsin saw growth in both dollars and numbers of loans to African American and Hispanic borrowers and in loan dollars to women.

In our efforts to reach out and help small businesses across the nation, lenders play an important role as partners, as it is through them that SBA financial assistance is channeled and managed. In FY 2014, SBA added 308 new lenders that, collectively, made 684 loans for nearly $317 million.

As exports continue to play a pivotal role in strengthening the nation’s economy, SBA loans to exporters grew by 3.7 percent in number of loans and 12 percent in dollar amount over last year.

One of the ways in which SBA helps small businesses is through providing essential bid and performance bonds to small contractors, which allows these small businesses to be more competitive when bidding on contracts, be they with the government or the private sector. In fiscal year 2014, SBA Office of Surety Bond Program saw an increase of four percent in total contract value, from $6.168 billion in FY 2013 to $6.413 billion in FY 2014. Total bond contract amount also grew from $1.262 billion in FY 2013 to $1.358 in FY 2014, an increase of eight percent.

For more information about the SBA’s loan programs and other financial assistance as well as services, please visit http://go.usa.gov/GQh3. For more information on SBA Wisconsin, visit http://www.sba.gov/wi.