banking-focusSmall business lending activity under the U.S. Small Business Administration’s 7(a) loan guaranty program set another national record in the last fiscal year, which ended Sept. 30.

During that year, the agency approved 52,044 7(a) loans for $19.2 billion, an increase of 12 percent in the number of loans and 7.4 percent in dollar amount over the previous year.

During the same time period, banks in Colorado made 1,441 Small Business Association 7(a) and 504 loans. As a result, small business owners accessed more than $654.3 million for their businesses, surpassing the previous year’s record by more than $32 million.

In El Paso County, the U.S. Bank National Association led the list of SBA 7(a) loan originations with 31. That bank loaned $2.97 million.

Central Bank and Trust made 13 loans, and they totaled $6.8 million.

Normally a leader in SBA loan origination, Wells Fargo Bank here made 18 loans totaling $4.7 million.
In total, banks in El Paso County made 109 SBA 7(a) loans worth $32.8 million and 20 SBA 504 loans totaling nearly $20 million.

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In Colorado, 267 loans worth $146 million were made to minority-owned small businesses, and 222 loans worth $80.4 million were made to women-owned businesses. Seventy-nine loans totaling $29.4 million were approved for veteran-owned businesses.

Accommodation and food service and retail were the industries that received the largest number of loans.

The 7(a) program offers loans to cover the majority of business expenses, such as short-term and long-term working capital, exports and refinancing debt under certain conditions.
The 504 loan program provides long-term fixed financing for real estate and equipment.

1 COMMENT

  1. As we learned recently from MIT Professor Jonathan Gruber, it is very easy to create a lack of transparency by simply sharing only part of the truth. This SBA press release follows that rule explicitly.

    First, this was not a record year for SBA lending – that was 2011. This is the third highest year.

    But the big deception here is that the SBA is reaching more business owners than ever before. So here are the real facts, grudgingly given to us by Terry Sutherland, SBA Press Director.

    98% of businesses have 1-19 employees. They need loans of $50-$150,000. In 2008, the average SBA loan was $185,000 and 24% of them were under $100,000. Using the statistics trumpeted in this article, the average SBA loan in 2014 was a bloated $369,038. And more critically, Sutherland says less than 9% of loans are now under $100,000. The SBA and the banks have nearly abandoned the 98% of businesses with 1-19 employees, in favor of giving loans to the 2% of the largest businesses in America.

    How did this happen?

    In 2008, the SBA embarked on the largest expansion of the definition of small in its history, redefining absurdly large businesses with 1,500+ employees and revenues north of $30+ million as “small”. So far this has resulted in 72,000 giant corporations being reclassified as small. That expansion continues today and tens of thousands of more giants will be miraculously made small again in the next two years.

    Both the banks and the SBA love this process because now they can make significantly fewer loans in much higher amounts to a few, exclusive large companies, and still claim they are helping “small” businesses. Nothing could be farther from the truth.

    This press release is a disgrace to the lack of transparency about what is really going on in the SBA, and news organizations need to stop reprinting as if it is the full truth. The full truth is that the SBA has abandoned the 98% in favor of the 2% who are more politically connected.

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