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News Release: Over $1 Billion Impact on Bay State Economy through SBA Capital Programs

In FY16, 7(a) loan program reaches more than $24.12 billion and 504 loan total grows for third consecutive year nationally; Massachusetts sees 19.3% jump in dollar amount for 7(a) & 504 lending, largest increase in past 5 years
Release Date: 
Wednesday, November 2, 2016
Release Number: 
16-29
Contact: 
Norman Eng 617-565-8510

BOSTON – Massachusetts is often referred to as Silicon Valley of the East -- with Boston, Cambridge and outlying communities building a reputation for Innovation, Impact Entrepreneurship and Hi-Tech Startups. As an international hub for entrepreneurship – often overlooked is the fact that the Bay State business community is also leading the way nationally through SBA underserved market loans, according to SBA lending data. In fiscal year 2016, the SBA Massachusetts District Office (out of 68 district offices) led the nation in the following categories:  #1 on loans less than $50k; #2 on loans less than $150k and underserved; #2 on total loan approvals; #2 in number of 7A loans approved; #5 in number of 504 loans approved; #1 office for fee waiver initiative savings.

 

“SBA Capital Programs allow entrepreneurs to get funding when certain risks and conditions preclude conventional financing,” said Robert H. Nelson, SBA Massachusetts District Director.  “Because of the supportive Bay State Small Business ecosystem, amazing lender network and tireless resource partner team – SBA programs in Massachusetts consistently rank at the top of national SBA indicators – telling us that this is a state that supports small business and is providing opportunities for underserved markets.”  

 

Capital Programs Highlights

Nationally
SBA approved more than 70,000 loans in the 7(a) and 504 loan programs in FY16.  These programs provided nearly $28.9 billion to small businesses and supported nearly 694,000 jobs.

In FY16, the 7(a) program supported a record number of loans -- more than $24.12 billion combined across 64,073 loans.  Both the total number and dollar amount of 7(a) loans increased by 1 percent and 2.6 percent respectively over the previous year. SBA continues to streamline and improve access to its loan program for small loans and underserved markets delivering more than 44,000 small loans of $350,000 or less in FY16.

In FY16, the 504 program grew by more than 10 percent to $4.74 billion (the third consecutive year of growth) and a 2 percent growth in loan volume.  Reauthorization of the 504 Debt Refinancing Program in May was instrumental in the success of the 504 Program in FY16.

Massachusetts

The Bay State capped FY16 with a 19.3% increase in dollar amount for the 7A and 504 programs; the largest increase in the past five fiscal years.  

The 7(a) Loan Guaranty Program approved 2,566 loans for a total of more than $383.3 million supported by a network of 145 lenders. These loans are available for most legitimate business purposes, including: purchase or construction of real estate, equipment and inventory, to finance fixtures and leasehold improvements, debt refinancing, and for working capital. Massachusetts ranked #2 nationwide in this category, with an increase in dollar amount of 16.9% from FY15

  • Eastern Bank was the #1 SBA 7(a) lender in Massachusetts for the seventh year in a row with 798 loans totaling more than $49 million and the #1 3rd party 504 lender with 36 loans totaling over $20 million. Eastern is also the #1 SBA lender in New England.
  • Citizens Bank ranked as the second highest producer of 7(a) loans with 226 approvals totaling over $37 million; Berkshire Bank ranked third with 175 loans totaling over $17 million.
  • Completing the list of top ten SBA lenders in Massachusetts are Rockland Trust Company, TD Bank, Leader Bank, Santander Bank, Cambridge Savings Bank, St. Mary’s Credit Union, and UniBank.

 

The 504 Loan Program approved 270 loans, supporting more than $395.7 million. SBA 504 loans are used to construct, purchase or rehabilitate real estate and can also finance machinery and equipment. Massachusetts ranked #5 nationwide in this category.

  • Bay Colony Development Corp. was SBA’s highest producer of 504 loans in Massachusetts with 89 loans totaling over $45.5 million.
  • Granite State Economic Development Corp. ranked second in volume with 79 projects – but led in dollar amount totaling over $62.6 million.
  • New England Certified Development was third with 60 projects totaling over $47 million.

 

The SBA’s Microlending Program, through seven microloan intermediaries, approved 79 loans totaling over $1.4 million. These loans provide up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand; an average microloan is about $13,000.  

  • Accion East located in Cambridge, is the #1 microlender in Massachusetts for both volume of loans and dollar amount, with 31 loans totaling over $377 thousand.

 

Fee Waiver Impact & Small-Dollar Lending

During this fiscal year, SBA again zeroed-out fees on loans of $150,000 or less – stimulating small dollar lending. The fee waiver has been authorized to continue in fiscal year 2017. 

Massachusetts led the nation on small dollar 7(a) loans, ranking #1 on loans less than $50,000 with a total of 1,323 approvals; and ranked #2 on loans less than $150,000 and underserved communities with a total 820 approvals. 

 

Additional Massachusetts Program Highlights

  • SBIC (Small Business Investment Company) Program funds in Massachusetts made 120 financings to 58 businesses for $255.8 million. 
  • SBIR (Small Business Investment Research) Program granted 155 awards totaling over $74 million.
  • Surety Bonding Program issued 72 bonds totaling $14.6 million.

About SBA Massachusetts District Office:
The U.S. Small Business Administration (SBA) was created in 1953 and since January 13, 2012 has served as a Cabinet-level agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.  The SBA helps Americans start, build and grow businesses.  Through an extensive network of field offices and partnerships with public and private organizations, the SBA delivers its services to people throughout the United States, Puerto Rico, the U.S. Virgin Islands and Guam. www.sba.gov/ma

SBA Massachusetts will hold an Annual Meeting honoring lenders at a special awards ceremony at The Tip O’Neill Federal Building in Boston on Thursday, November 10, 2016.  For more information, please contact: Norman Eng, 617-565-8510

For more information about SBA Massachusetts lending figures in fiscal year 2016, the following resources are available:

 

 

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