Strong SBA Small Business Lending Trends
By US Small Business Administration
WASHINGTON, DC— The United States Small Business Administration announced FY19 lending numbers showing that it guaranteed more than $28 billion to entrepreneurs that otherwise would not have access to capital to start, grow, or expand their small businesses.
“A strong economy is powering America’s thirty million small businesses, and the SBA’s FY19 numbers bear that out,” SBA Acting Administrator Chris Pilkerton said. “When the economy is doing well, 7(a) lenders are more willing to provide capital without the need for a federal loan guarantee. Our 504 and Microloan programs continued to grow from last year, as all of these loans are designed to create jobs and grow all small businesses in communities across the country. We continue to be proud that the SBA is here to help America start, grow, and expand opportunities for entrepreneurs.”
In FY19, SBA’s flagship 7(a) loan program made approximately fifty-two thousand 7(a) loans totaling $23.17 billion. The 504 loan program had another year of increased performance, with more than six thousand loans made for a total dollar amount of more than $4.9 billion.
“With a strong economy and historically solid small business optimism, we know that 7(a) lenders are making loans conventionally without the SBA guarantee. We also saw a 4.3 percent growth in the 504 loan program due to the longer term and low fixed interest rate that the product provides to small businesses,” said Associate Administrator for SBA’s Office of Capital Access William Manger. “We are also proud that our Microloan program had another record year with a nearly 7.5 percent increase in small business lending.”
In FY19, there was significant growth of dollars lent in the SBA’s Microloan program, with more than five thousand five hundred loans approved for nearly $81.5 million.
In addition to the strong lending numbers, the SBA continues to innovate and improve processes by leveraging enhanced technologies. Lender Match is an SBA technology platform that gives entrepreneurs the ability to complete a quick online form, without registration or cost to the user to connect with an SBA-approved lender within forty-eight hours. To date, Lender Match has generated 4.4 million leads on behalf of small businesses to our lenders, and lenders have contacted more than two hundred thirty thousand unique borrowers with financing options.
For more information about SBA’s loan programs, financial assistance, and other services, visit www.sba.gov.
About the 7(a), 504, and Microloan programs
The 7(a) loan program is the SBA's primary program for providing financial assistance to small businesses and offers guarantees on loans to small businesses of up to $5 million on reasonable terms and conditions. 7(a) loans are commonly used for acquiring land, purchasing equipment, or working capital. The CDC/504 loan program provides capital to small businesses for the acquisition of fixed assets to promote economic development in the form of long-term fixed-rate financing on reasonable terms. Under this program, the SBA authorizes Certified Development Companies (CDCs) to provide financing to small businesses with the help of third-party lenders (typically banks). The maximum loan amount is generally $5 million; however, certain eligible energy-efficient or manufacturing projects may qualify for up to $5.5 million. The Microloan program provides loans to not-for-profit lending intermediaries that, in turn, make loans of up to $50,000 to small businesses on reasonable terms.
About the United States Small Business Administration
The United States Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
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