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SBA Hits Another Lending Record in FY 2014

7(a) Lending Opens Opportunities for America’s Small Businesses
Release Date: 
Thursday, November 6, 2014
Release Number: 
20141106-001
Contact: 
Robert Goza (610) 382-3084 | robert.goza@sba.gov

WASHINGTON – The U.S. Small Business Administration 7(a) Loan Program reached another lending record in FY 2014, announced today by SBA Administrator Maria Contreras-Sweet. By the end of the fiscal year (Sept. 30), SBA had approved 52,044 7(a) loans for $19.19 billion, an increase of 12 percent in number loans and 7.4 percent in dollar amount over fiscal year 2013.

In SBA’s Philadelphia District Office, which administers SBA programs and services for the eastern 40 counties of Pennsylvania, there were more loans made this fiscal year although the total loan volume of dollars was lower. Following three previous years of very high numbers in the Philadelphia District, SBA’s guarantee fee waiver for loans below $150,000 lead to 1,171 7(a) loans for $426.4 million – compared to 1,061 for $466 million in 2013 and 991 for $326 million 2012. While total loan volume fell from 2013, the average sized loan dropped this fiscal year to $364,000 from $439,000.

“This is good news for small businesses in eastern Pennsylvania, because it means there has been more access to smaller loans, which are typically the toughest for borrowers to access. The fee waiver allows us to make more loans to borrowers looking for those smaller loans,” said SBA mid-Atlantic Regional Administrator Natalia Olson-Urtecho. “It’s good to see our continued lender outreach and training efforts help keep the pace of SBA loan-making healthy. I’m proud to see SBA-guaranteed financing to small businesses help entrepreneurs start, grow and create new jobs for Americans.”

The 7(a) program is designed to provide small businesses with the most comprehensive type of financial assistance to cover the vast majority of business expenses, such as short and long-term working capital, exports, and refinancing existing debt under certain conditions.

“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,” said Contreras-Sweet. “Thanks to the hard work and outreach by our lending partners, SBA staff, and our resource partners, as well as the small business owners themselves, we have been able to put more capital into the hands of our nation’s entrepreneurs. We know that America’s small businesses pack the biggest punch, creating two out of every three net new private sector jobs in the U.S. These small businesses are the cornerstone of our communities, so their success and expansion is vital to the nation’s economic growth.”

SBA had been authorized $17.5 billion in the FY 2014 lending program.  It became clear that lending would exceed that amount; therefore the agency secured an increase for the 7(a) program in the Continuing Resolution that was approved in mid-September.

Other SBA loans that did well in fiscal 2014 were those $150,000 and under. Spurred by the fee relief implemented at the beginning of the fiscal year (fees were set to zero), these loans saw an increase of 23 percent in number of loans (30,675) and 29 percent in approved dollars ($1.86 billion) over fiscal year 2013 (24,923 and $1.44 billion respectively).

“Veteran Advantage fee relief, in which we dropped fees on loans under $350,000 to veterans, was also instrumental in helping veteran small business owners,” said Olson-Urtecho.  “We started the veterans program in January, and by the end of the fiscal year that amounted to a savings of $610,000 to these small businesses. Both relief programs are being extended through fiscal year 2015.”

Small businesses reflect the dynamic demographics of the United States. In FY 2014, the number of SBA loans to African Americans grew by roughly 36 percent over the previous year. For Hispanics and women, there was an increase of 14 percent for each group.

In our efforts to reach out and help small businesses across the nation, lenders play an important role as partners, as it is through them that SBA financial assistance is channeled and managed. In FY 2014, SBA added 308 new lenders that, collectively, made 684 loans for nearly $317 million.

As exports continue to play a pivotal role in strengthening the nation’s economy, SBA loans to exporters grew by 3.7 percent in number of loans and 12 percent in dollar amount over last year.

One of the ways in which SBA helps small businesses is through providing essential bid and performance bonds to small contractors, which allows these small businesses to be more competitive when bidding on contracts, be they with the government or the private sector. In fiscal year 2014, SBA Office of Surety Bond Program saw an increase of four percent in total contract value, from $6.168 billion in FY 2013 to $6.413 billion in FY 2014. Total bond contract amount also grew from $1.262 billion in FY 2013 to $1.358 in FY 2014, an increase of eight percent.

For more information about the SBA’s Loan Programs and other financial assistance as well as services, please visit http://go.usa.gov/GQh3.

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