SBA Sees $8 million Jump in Loans over Last Year; Access to Capital Remains Critical to Growth in State

$130.9 million in Guaranteed Financing to Small Businesses Over Last 12 Months Directly Creates 1,500 New Jobs
Release Date: 
Friday, October 31, 2014
Release Number: 
15-01
Advisory Date: 
Friday, October 31, 2014
Contact: 
Michael Foutch

Omaha, NE – The number of small business loans financed through the SBA proved crucial to start-up and existing small business owners across Nebraska by providing needed access to capital thanks to the fourth-highest loan number in the state’s history in FY 2014, which ended September 30.

The SBA approved 377 loans for $130.9 million in loan guarantees through banks, credit unions and certified development companies across the state.  The dollar amount is the fourth-highest in Nebraska history and a jump of $8 million, or 6.7 percent, over last year. That continues the trend of Nebraska outpacing the rest of its four-state region, which also includes Missouri, Kansas and Iowa, which overall saw an eight percent drop in SBA-financed loan dollar volume.

SBA loans in Nebraska ranged from $5,000 to $5,000,000 with an average dollar amount of $347,475, the latter figure up almost 14 percent from last year.  As a direct result of SBA-guaranteed small business financing throughout the state this fiscal year, more than 1,500 new jobs are being created in Nebraska, and more than 2,500 jobs are being kept on payrolls.  According to the SBA’s Office of Advocacy, half of all jobs in Nebraska are from companies with fewer than 100 employees.

In a strong sign of confidence in Nebraska’s entrepreneurial economy, 45 percent of SBA loan approvals in Fiscal 2014 went to fund new businesses.  Across the nation, less than 30 percent of SBA-backed loans were made to start-up companies. Most of SBA financing went to small businesses located in urban areas (72 percent), with 107 loans going to small businesses in rural regions of the state.

A little more than a year ago, the SBA announced it would waive up-front borrower fees and on-going servicing fees from lenders for its guarantee loans for $150,000 and under, hoping to encourage lenders to consider making more of those smaller loans to its small business customers.  In Nebraska, that effort paid off, as 194 loans were for that amount or less, providing start-ups and existing businesses $13.1 million in needed capital, while saving more than $174,804 in cumulative fees.  The SBA collects up-front fees from borrowers and on-going servicing fees from lenders to ensure the agency holds enough in reserve to meet its guarantee obligations to lenders across the country.

Overall, the pace of SBA loan-making in Nebraska remains a healthy sign for the 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.

“Nebraska's economy always has been built on the foundation of the success of our small businesses. We're proud to support the men and women who get up every day, turn the storefront signs from closed to open, and make our state run,” said SBA Nebraska District Office District Director Leon Milobar.  “We've seen small businesses have done a great job obtaining the critical financing they need to have the ability to respond and adapt quickly to the ever-changing economic climate.”

For example, thanks to an SBA guaranteed loan this fiscal year, Pamela Pacheco started All Business & Commercial (ABC) Recycling, a North Platte company working with commercial, agricultural and industrial business owners to lessen the load on landfills, with dramatic results.  Since opening their doors mid-June, Pacheco said they’ve helped recycle some 250,000 pounds of disposed material; by the end of October another quarter of a million pounds will be diverted from the waste stream.

And, Open Range Beef in Gordon was approved for $3.8 million in financing in April using the SBA’s International Trade Loan program, offering access to capital for a small business in a position to expand existing export markets or develop new export markets.  The plant will serve as a supplier for organic, natural grass-fed, premium and halal beef for domestic and overseas markets, and in has given a small town in northwest Nebraska a big economic jolt.

The top four small business industries receiving SBA-guaranteed financing in Nebraska were accommodation and food services ($26.9 million, up $6 million from last year); health care and social assistance ($23.9 million, up more than $8 million from last year; manufacturing ($19.9 million, up more than $7 million from last year); retail trade ($13.8 million), and construction ($12.1 million, up slightly from last year).

US Bank made 46 SBA-guaranteed loans, more than any other lender in the state with nearly $7 million in volume. First National Bank of Omaha made 40 SBA loans for $14.3 million.

The SBA’s 504 loan program, designed to provide attractive, fixed interest rate loans on large equipment and real estate projects, enjoyed another successful year with 36 loans supporting $62.7 million in projects for Nebraska businesses. With the 504 program, the SBA works with a Certified Development Company (CDC), a private, nonprofit corporation to provide financing through this program to small businesses. Nebraska’s CDC’s are the Nebraska Economic Development Corporation and Community Development Resources. Both are headquartered in Lincoln.

To identify the entire project supported through 504 loan program financing, SBA reports our loan totals, including both 504 and guaranty loans, as supporting $165.8 million in overall lending to small business in Nebraska.

In addition to $130.9 million in actual loan guarantees, Nebraska’s SBA-supported microlenders; the Rural Enterprise Assistance Project in Lyons, Lincoln-based Community Development Resources, West Central Development District in Ogallala, and the Omaha Small Business Network at 24th and Lake in Omaha combined to make 79 loans for $979,316 in Fiscal 2014, 40 percent of which went to new start-ups.  The average loan of more than $12,000 assured access to capital from these microlenders was available to meet even the smallest financing needs, and helped those businesses across the state create nearly 70 new jobs.