NEWARK, NJ---The U.S. Small Business Administration supported $605 million in loans to New Jersey small business owners during the agency’s fiscal year 2012 (the period from Oct. 1, 2011 thru Sept. 30, 2012). It was the third largest dollar volume on record for the state, reaffirming that the pace of SBA-loan approvals are a sign of a healthier economy and stronger credit markets.
“Clearly, lending to small business owners is trending upwards in New Jersey,” said SBA New Jersey District Director Al Titone. “During the last nine months of this fiscal year (Jan. 1, 2012 thru Sept. 30, 2012) we have seen a 31 percent increase in dollar volume and a 28 percent increase in the number of loans that the SBA has approved over the same period in 2011.”
“Considering this is the first full year, since incentives from the Jobs Act of 2010 were not in place for lenders and borrowers, I am quite pleased with the increase in loan volume,” said Titone. “We are definitely heading in the right direction.”
According to Titone, 1,172 New Jersey small business owners benefited from the $605 million in loans that his office approved during the fiscal year. Of that total, 68 percent of total loan dollars went to existing businesses, while 32 percent went to startup companies. The average SBA loan to a New Jersey small business owner during fiscal year 2012 was for $516,211.
The near-record pace was driven in part by a record year for the Certified Development Company (504) loan program, which supported 146 deals in New Jersey for $148 million. Typically, 504 loans are used to finance larger equipment and commercial real estate purchases. The strong performance of 504 loans was boosted by the temporary 504 refinancing program, which was responsible for about 25 percent of the 504 program loans made in FY 2012. The recently expired 504 refinancing program was part of the incentive package under the Jobs Act.
Titone noted that over the past year, SBA began streamlining and simplifying many of the loan programs in order to provide more access and opportunity for both lenders and small businesses. As part of this effort, SBA has 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.
Bergen County led all SBA lending with 205 loans for $95.8 million. Middlesex County had thesecond most loan approvals with 118 loans for $71.8 million, followed by Monmouth County with 110 loans for $39.1 million. Rounding out the top five are Union County with 81 loans for $40.5 loans; Morris and Essex Counties with 71 loans for $38.3 million and $33.7 million.
According to Titone, the SBA worked with 93 lenders throughout fiscal year 2012. The leading lender was JPMorgan Chase Bank with 143 loans for $15.5 million. TD Bank was the second leading SBA lender with 119 loans for $23.5 million, followed by New Jersey Business Finance Corp with 74 loans for $83 million. Rounding out the top five lenders were Sovereign Bank with 67 loans for $11.3 million and Regional Business Assistance Corp. with 64 loans for $48.6 million.
“Our mission at the SBA is to ensure that there is an availability of financing for small businesses trying to establish themselves, grow and create new jobs,” said Titone. “It’s what the SBA does best.”