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SBA Loans Top $754 Million in Massachusetts

SBA FY18 loan volume reaches more than $30 billion and 72,000 approvals nationwide; Massachusetts 7A & 504 combined approvals increased by 6.19% in dollar amount; 504 approvals increased in dollar amount by 23.31%
Release Date: 
Tuesday, October 23, 2018
Release Number: 
19-1
Contact: 
norman.eng@sba.gov, 617-565-8510

BOSTON – The U.S. Small Business Administration announced FY18 lending numbers showing that it guaranteed over $30 billion to small businesses that otherwise would not have had access to capital.

“We are providing tools, resources and access to capital for America’s 30 million small businesses, and our FY18 numbers bear that out,” SBA Administrator Linda McMahon said. “SBA’s 7(a) and 504 loan programs have never been more dynamic, easy to use and accessible—helping small businesses succeed and thrive.  Our loan programs in FY18 continue to show strong performance, and we believe the President’s tax cuts and deregulatory actions will help more small businesses grow and prosper in the coming year.”

 

National Capital Programs Highlights
In FY18 there were approximately 60,353 7(a) loans made, with a total dollar amount of $25.37 billion.

The SBA’s 504 loan program had another year of high performance for lending, with 5,874 loans made for a total dollar amount of over $4.75 billion.

In FY18 SBA launched the 25-year Debenture, which offers an extra 60 months of financing at a fixed rate for small businesses. Since its introduction in April, over 1,000 debentures had been sold by the end of September.

In FY18 there was significant growth in the SBA’s smaller loans, including a record volume of dollars lent in the Microloan and Community Advantage Programs. Specifically, over 5,000 loans were approved for over $72 million in the Microloan program and over 1,000 loans for over $150 million in SBA’s Community Advantage program.

The SBA continued to innovate and improve processes by leveraging enhanced technologies. Lender Match is an SBA technology platform that gives entrepreneurs the ability to complete a quick online form, without registration or cost, and be connected with an approved SBA lender within 48 hours. To date, Lender Match has generated 3.6 million leads on behalf of small businesses to our lenders and over 160,000 unique borrowers have been contacted by lenders with financing options. 

Another technological innovation was the development of the SBA’s Franchise Directory, which was launched this year and has resulted in an over 50 percent increase in eligible franchise brands. There are currently 3,192 brands on the Franchise Directory. When the directory was first published in October 2017 there were only 2,034 brands.  In FY18, SBA has seen a year over year increase of over 21 percent in 7(a) and 504 dollars going to franchises.

 

Massachusetts District Office Capital Programs Highlights

In FY18 the Massachusetts District Office (out of 68 district offices) finished top six nationwide in the following categories: #3 on loans less than $50k; #5 on total loan approvals; #6 in number of 7(a) loans approved; #5 in number of 504 loans approved.

“177 active SBA lenders in our Massachusetts network are supporting job creation and economic growth in our local communities every day,” said Robert H. Nelson, SBA Massachusetts District Director. “Together this fiscal year 8,058 jobs were created and 9,047 jobs were retained in the Commonwealth in a collective effort to build a vibrant and vigorous economy.  We thank all of our partners and friends for working with the SBA to ensure equitable capital access.” 

In FY18 the Massachusetts District Office saw a decrease in number of approvals for the 7(a) and 504 programs combined, but an increase in dollar amount of 6.19% or $30 million.  

The SBA through its flagship 7(a) Loan Guaranty Program approved 2,126 loans in Massachusetts for a total of more than $349 million supported by a network of 177 lenders, including 16 credit unions.   The smallest 7(a) loan was $3,000 and the largest was $5 million.

  • Massachusetts ranked #6 nationwide in this category; approvals decreased by 423 or 16.6% from 2,549 approvals in FY17 - while dollars approved remained steady at $349.19 million.
  • Eastern Bank was the #1 SBA 7(a) lender in Massachusetts for the tenth year in a row with 565 loans totaling $43.29 million and the top third party 504 lender with 29 loans totaling $10.87 million. Eastern is also the #1 SBA lender in New England.
  • TD Bank ranked as the second highest producer of 7(a) loans with 227 approvals totaling $14.2 million; Citizens Bank ranked third with 144 loans totaling over $21.14 million.
  • Completing the list of top ten SBA lenders in Massachusetts are Independence Bank, Leader Bank, Berkshire Bank, Salem Five, Santander Bank, Rockland Trust, and Cambridge Savings Bank.

 

The 504 Loan Program approved 270 loans, supporting more than $171 million. Third Party loans which are part of the 504 projects, totaled in excess of $231 million.  Under the SBA 504 program, loans ranged from $56,000 up to $5,000,000 – with nine projects in excess of $10,000,000 (SBA 504 loan and Third Party loan combined).

Massachusetts ranked #5 nationwide in this category.

  • Bay Colony Development Corp. was SBA’s highest producer of 504 loans in Massachusetts with 93 loans totaling $51.51 million.
  • New England Certified Development ranked first for dollars approved, totaling $52.89 million and third with 60 loans approved.
  • Granite State Economic Development Corp. ranked second in volume with 76 projects totaling $43.05 million.

 

The SBA Microloan Program, through ten microloan intermediaries, approved 102 loans totaling $2.08 million.
Microloans provide up to $50,000 to help small businesses start-up and expand; In Massachusetts, an average microloan was $20,352. 

  • Accion East is the #1 microlender for volume of loans, approving 26 loans totaling $396,184.
  • South Eastern Economic Development is ranked #1 for dollar amount totaling $482,000 and second in volume with 14 approvals.
  • Common Capital ranked third in volume with 13 approvals, totaling $358,500.

 

Fee Waiver Impact & Incentives
In FY18 SBA zeroed-out fees on loans of $125,000 or less again, stimulating small dollar lending and also offering incentives for veteran-owned business up to $350,000.

For FY19, the SBA will again be offering incentives for veteran-owned businesses and will offer decreased fees for Rural and HUBZone located businesses on loans up to $150,000.

 

SBA Office of Advocacy
Massachusetts is home to approximately 652,661 small businesses according to data compiled by SBA’s Office of Advocacy.  The 2018 Small Business Profile for Massachusetts reported that small businesses in the Bay State created 36,355 net new jobs in 2015; are comprised of 89,930 minority-owned businesses; and 9,193 firms export internationally.

 

SBA Massachusetts will hold an Annual Meeting honoring lenders at a special awards ceremony in Worcester on Friday, November 9, 2018.  For more information, please visit: www.sba.gov/ma

 

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About the 7(a) and 504 loan programs
The 7(a) loan program is the SBA's primary program for providing financial assistance to small businesses and offers guarantees on loans to small businesses of up to $5 million on reasonable terms and conditions. 7(a) loans are commonly used for acquiring land, purchasing equipment, or working capital. The CDC/504 loan program helps small businesses acquire fixed assets to promote economic development in the form of long-term fixed rate financing for fixed assets on reasonable terms. Under this program, the SBA authorizes CDCs (Certified Development Companies) to provide financing to small businesses with the help of third-party lenders (typically banks). The maximum loan amount is generally $5 million; however, certain eligible energy-efficient or manufacturing projects may qualify for more than one 504 loan up to $5.5 million each.

About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.