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SBA Lending in North Dakota Almost Doubles in 2013
In the first four months of Fiscal Year 2013, October 1, 2012 through January 31, 2013, SBA approved 69 loans or $35.6 million in financing for ND small businesses. The $35.6 million is almost double the amount approved in the first four months of Fiscal Year 2012.
For the fiscal year ending October 31, 2012, SBA approved 215 loans for a total value of $97.5 million. A review of the approved loans shows that the size of individual SBA loans has increased significantly. The largest loan was for an auto dealer in western North Dakota, but a loan as small as $5,000 was also approved for an electrical contractor in eastern North Dakota. From motels to lawyers and from pet clinics to specialized child learning centers, SBA continues to provide financing for start-up and existing businesses in North Dakota.
The number of lenders participating in SBA programs has increased this year as well. Thirty-two different lenders provided financing using SBA programs compared to 26 for the same period last year. The largest growth in SBA financing came through the use of SBA’s 504 program. The 504 program provides favorable terms with long-term financing at a fixed rate for real estate and equipment. The current interest rate for a ten year maturity is 3.6825% and twenty year financing is at 4.212%. Loans through the 504 Program can finance up to 90 percent of a project’s cost using a combination of three resources: the borrower, the bank or credit union and a Certified Development Company (CDC). There are four CDCs in North Dakota. Low interest rates and a vibrant economy have fueled significant growth throughout the state.
As can be expected SBA lending in western North Dakota is strong, but eastern North Dakota is not left out of the mix. Over half of all SBA loans and over a third of all capital provided to small business through SBA programs have been approved for businesses in counties in the eastern part of the state in 2013. For more information on SBA programs including a list of CDCs, visit the North Dakota District Office web page at www.sba.gov/nd.