SBA opens capital access for small firms
For two years in a row, the U.S. Small Business Administration has helped to put more than $30 billion into the hands of small-business owners across the country.
In fiscal year 2012, SBA's loan programs posted the second-largest dollar volume ever, surpassed only by the 2011 fiscal year, which was heavily boosted by the loan incentives under the Small Business Jobs Act of 2010.
The pace of SBA loan-making is a healthy sign for the national economy and the credit markets and is one of the foundations for ensuring the availability of financing to small businesses trying to establish themselves, grow and create new jobs for Americans.
Right here in SBA's Philadelphia District, responsible for the 40 eastern counties of Pennsylvania, there were a total of 1,113 loans for more than $446 million in fiscal year 2012, the third-highest volume year on record for overall SBA-backed loan volume and the highest-volume year ever for its 504 loan program.
In the past year, SBA began streamlining and simplifying many of its loan programs to provide more access and opportunity for lenders and small businesses. As part of this effort, SBA encouraged lenders to use more of their own paperwork and the agency's updated processing systems, so that more than 80 percent of its loan applications can now be processed online.
These efforts, among other loan enhancements, resulted in nearly 1,300 lenders returning to SBA lending and opened up more points of capital access for small businesses — wherever they do business. The results are clear:
• 504 loans set an all-time record. By improving and simplifying the loan-making process and reducing paperwork, SBA saw a record year for the Certified Development Company (504) loan program, which helped 9,471 entrepreneurs supporting $15.09 billion in small-business lending. Here in eastern Pennsylvania, SBA guaranteed 122 of these loans, totaling more than $120 million.
• The CAPLines loan program jumped 400 percent. A revamped CAPLines program, which provides working lines of credit to small businesses such as manufacturers and government contractors, jumped 400 percent from 108 loans and $118 million in 2011 to 532 loans and $410 million in 2012.
• Low-dollar loans are on the rise. Lenders are making more low-dollar loans using SBA Community Advantage and Small Loan Advantage loan programs that encourage lenders to make low-dollar loans, which are an important tool for small businesses. In fiscal year 2012, the number of Community Advantage loans increased to more than 11 times the number of loans in 2011. The Small Loan Advantage program ended the fiscal year with 820 loans for $150.6 million — nearly 80 percent of the year's SLA loans were after SBA simplified the processes June 1.
• SBA's Growth Capital program broke a record for the third consecutive year. The Small Business Investment Company debenture program provided a record $2.95 billion to small businesses in FY 2012, a 14 percent increase over the previous year and the highest single-year volume in the 54-year history of the program. This good news is due in part to a number of improvements that contributed to an increased number of new SBIC licenses and reduced license processing times.
Here in SBA's Mid-Atlantic Region, your local district office in Philadelphia — with branches in Wilkes-Barre and Harrisburg — is ready to help. For more information, visit www.sba.gov.
Natalia Olson-Urtecho is the regional administrator for the U.S. Small Business Administration Region III (Pennsylvania, Delaware, Maryland, West Virginia, Virginia and Washington, D.C), which is headquartered in King of Prussia.