SBA backed near-record $30.2 billion in small-business loans in fiscal year just ended

Published on Tuesday, October 9, 2012 by Kent Hoover, The Business Journal’s Washington Bureau Chief

The Small Business Administration supported $30.2 billion in lending to small businesses in fiscal 2012, which ended Sept. 30.

That’s the second-largest amount of loans in the agency’s history, beaten only by 2011’s $30.5 billion. The 2011 record was achieved thanks to temporary incentives — higher government guarantees and reduced fees — that made SBA loans more attractive to borrowers and lenders.

Another temporary program — the ability to use the SBA’s 504 program to refinance commercial real estate mortgages — helped the SBA set a new lending record of $15 billion through that program in 2012. (That total includes conventional loans that are paired with SBA-backed loans in this program, which is used to fund fixed assets such as real estate.)

The SBA also backed more than $15 billion in 7(a) loans, its flagship lending program. More than 44,000 small businesses received these loans, which are attractive because of their long terms.

“Reaching such strong numbers is a clear sign that both the business and lending communities are regaining their confidence in the economic climate of the country,” said SBA Administrator Karen Mills. “It means that the credit markets are increasingly willing to help small businesses establish themselves, grow and create new jobs for Americans.”

Under the temporary funding bill approved by Congress for this year, the SBA will be able to make up to $16 billion in 7(a) loans this year. Congress increased the federal subsidy the SBA needs to guarantee small business loans from $210 million to $333 million.

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