NEWARK, NJ---The U.S Small Business Administration (SBA) New Jersey district office reported that loan approvals to New Jersey small business owners were up 8 percent during the agency’s first quarter of fiscal year 2014, the period from October 1, 2013 through December 31, 2013.
According to SBA New Jersey District Director Al Titone, state small business owners received 268 SBA-backed loans for $139 million compared to the 249 loans for $153 million approved during the same period last year.
“Despite 16-days of a government-wide shutdown, we find ourselves 8 percent ahead of last year’s pace,” said Titone. “It is an encouraging sign that more lenders are making the effort to make capital available to small businesses throughout the state. It just might be a preview of the growth and expansion to come in 2014.”
“It is fair to say that the loss of 16 days in October has hurt our overall monthly average of loan approvals during the first quarter,” said Titone. “We’re looking to build on the lending activity that took place in November and December. I suspect that over time we will see an increase in percentage over the next nine months.”
Titone noted that eight of New Jersey’s 21 counties saw an increase in SBA loan approvals during the first quarter of fiscal year 2014. During that same time, loan approvals for nine counties decreased, while loan approvals for four counties remained unchanged. “Obviously, we want to work with the 13 counties that either have decreased or remained unchanged in their loan approvals from last year,” said Titone. “The good news is we are building momentum and have nine months to turn it around. The strategy going forward is to make strides in working with individual county economic development authorities, as well as individual municipalities who are looking to expand their business communities.”
The counties that showed the biggest gains in SBA loan approvals were: Hunterdon County with a 175 percent increase going from four loans to 11 loans; Somerset and Ocean Counties had a 70 percent increase in loans, both counties had 17 loan approvals up from the 10 loans that were approved last year during the same time period. Morris County showed a 62 percent increase going from 13 loans to 21 loans, while Monmouth County showed a 20 percent increase in loans by going from 20 loans to 24 loans.
Also, during the first quarter of fiscal year 2014, Noah Bank was the top SBA lender with 25 loan approvals for $13.3 million. Wells Fargo Bank and TD Bank followed with 21 loans for $7.0 million and $2.6 million respectively. Santander Bank ranked fourth with 19 loans for $2.6 million. Rounding out the top five lenders was JPMorgan Chase Bank with 15 loans for $1.5 million.
According to Titone, the average SBA loan during the first quarter of 2014 was $519,000, down from last year’s first quarter average of $614,000. “With the SBA introducing no fees for loans under $150,000 during fiscal year 2014, I believe the average loan may be even lower by the end of this year,” said Titone. “Setting fees at zero effectively makes these loans cheaper for borrowers, encouraging lending to small businesses that face the most constraints on credit access and will create lending opportunities important for underserved communities.”
“We are seeing a shift in momentum when it comes to small and mid-sized companies gaining access to capital,” said Titone. “With more lending products available and more lenders in place to implement those programs, we expect to see an increase in SBA loan approvals during 2014.”