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SBA Achieves Historic Small Business Lending for Fiscal Year 2020

Carranza: Nearly nine million loans worth $750 billion stabilized small business sector and put it on the road to recovery
Release Date: 
Thursday, October 29, 2020
Contact: 
Matthew.Coleman@sba.gov

WASHINGTON – The U.S. Small Business Administration announced summary loan data of Fiscal Year 2020, which includes the financial assistance provided through traditional loan program lending as well as additional aid provided through the CARES Act.  Fiscal Year 2020 spanned October 1, 2019 through September 30, 2020.

Loans guaranteed through traditional SBA lending programs exceeded $28 billion; however, enactment of the CARES Act significantly augmented that number by dramatically increasing loan volume guaranteed.

For example, in the recently closed fiscal year, the Paycheck Protection Program (PPP) provided an additional 5.2 million loans worth more than $525 billion national.  The SBA Economic Injury Disaster Loan (EIDL) Program, which is administered by the agency’s Office of Disaster Assistance, added another 3.6 million small business loans valued at $191 billion. Further added to this amount is the additional 5.7 million EIDL Advances worth $20 billion. As of the last Disaster Assistance report, New York State saw over 300,000 EIDL loans approved for over $17.3 billion.

“In response to the unprecedented challenges faced by small businesses this year, the Trump Administration provided more than three-quarters of a trillion dollars in financial assistance to support impacted small businesses. SBA lending data further reflects the extraordinary commitment this Administration has made to supporting entrepreneurs in underserved communities,” SBA Administrator Jovita Carranza said.

Highlights from the PPP include:

  • 27% of the PPP loan dollars were made in low-and moderate-income communities which is in proportion to the percentage of population in these areas:
  • More than $133 billion, or 25%, of PPP loans were approved for small businesses in historically underutilized business zones (HUBZones); and,
  • Over $80 billion, or 15%, of total PPP dollars were approved to small businesses in rural communities.

“In addition to the tremendous amount of aid provided by the CARES Act via the PPP and EIDL loan programs, our regular loan programs showed solid year-over-year improvement, especially within our 504 and Microloan programs,” Carranza noted.

In just six days, the SBA built and launched the largest economic response program aimed at small businesses – the Paycheck Protection Program (PPP). SBA issued more than 3.6 million Covid-19 EIDL loans worth over $190 billion to small businesses and non-profits impacted by the pandemic, providing them with much-needed working capital at low-interest rates with no payments for an entire year.

Additionally, SBA issued 5.7 million EIDL Advances worth $20 billion. Although the Congressionally-set Paycheck Protection Program application period has closed, and EIDL Advance appropriations fully expired, the agency is still accepting Economic Injury Disaster Loan applications through late December.

“The SBA has mobilized the greatest public-private disaster response in modern history. The agency built and launched the largest economic response program aimed at small businesses in American history in just six days,” said SBA Atlantic & Mid-Atlantic Regional Administrator Steve Bulger, who oversees the federal agency’s operations throughout much of the East Coast.

“Over the last fiscal year, SBA approved more loans – by value and volume – than it has in the agency’s entire 67-year history. PPP loans supported more than five million impacted small businesses – and over 300,000 in New York state – allowing them to adapt in order to keep their workers paid and receiving their healthcare and benefits in a changing economic environment,” Bulger said.

Lenders reported that minority business owners received $7.5 billion in combined 7(a) and 504 lending, or 27% percent of the SBA’s loan portfolio. The 504 loan program had another year of increased performance, with more than 7,000 loans made for a total dollar amount of more than $5.8 billion or approximately 17.5% in year over year dollar amount. In September, SBA approved more than $1 billion in 504 loans which is a record for monthly volume.

Further reported data shows SBA’s 7(a) lending to women-owned businesses was nearly $2.7 billion in FY 2020 while lending from the 504 loan program to women-owned businesses was over $522 million. Additionally, loans to veterans totaled nearly $835 million for the 7(a) and 504 programs.

In FY20, SBA’s flagship 7(a) loan program made approximately 42,000 7(a) loans totaling $22.55 billion. The 504 loan program had another year of increased performance, with more than 7,000 loans made for a total dollar amount of more than $5.8 billion.

In fact, SBA lending to underserved populations posted another strong year. Lenders reported that minority business owners received $7.5 billion in combined 7(a) and 504 lending, or 27% percent of the agency’s loan portfolio.

Further reported data shows SBA’s 7(a) lending to women-owned businesses was nearly $2.7 billion in FY20 while lending from the 504 loan program to women-owned businesses was over $522 million. Loans to veterans also totaled nearly $835 million for the 7(a) and 504 programs.

SBA New York District Director Beth Goldberg, who leads the nation’s largest SBA field office serving metropolitan New York, pointed to Jill Tapia and her Manhattan-based Cornerstone Strategic Branding, as one woman-owned small business that has achieved success thanks to an SBA-backed 7(a) loan in the past year.

A previous 23-year employee of the company, Jill was able to purchase Cornerstone Strategic Planning when its previous male owners sought to sell. By leveraging a $1 million 7(a) loan from SBA-lending partner BNB Bank, Jill transformed the firm into a woman-owned small business small business employing 19 that helps create and produce brand identities for other companies, predominately in the food, beverage, candy and consumer packaging industries. Today, they count Nestle, Gorton’s, Red Bull, Mylanta, Nissin, Ferrara Candy Company and others among their clients.

“I needed more capital than I had and even after working there for so long, I had no idea how to make financing work for me. I had never thought I’d own my own business,” Tapia said.

In addition to 7(a) funds, Cornerstone Strategic Branding also was the recipient of a $500,000 Paycheck Protection Program loan that helped support the small business’ payroll and health benefits as the company quickly transferred to a remote work setting. Tapia, who calls the PPP a “lifesaver” that “really helped me during the time that I needed help the most” kept her entire workforce employed through state and local closures, with no layoffs and no reductions to salaries. They returned to their new office space on October 10.

“Jill Tapia utilized SBA’s traditional and COVID-19 programs to not only purchase and grow her business, but also pivot and recover from the adverse effects COVID-19 had on Metro New York. Jill is the epitome of an SBA success story, using the many financial resources the federal government makes available to entrepreneurs – in addition to her own creativity and tenacity - for her woman-owned small business,” Goldberg said.

Additionally, the SBA’s Microloan Program, which specifically helps businesses in underserved communities, achieved a second straight record year performance with nearly $85 million dollars going to over 5,800 small businesses. Thirty-four percent of microloans made in FY20 went to Black-owned small businesses.

For more information about SBA’s loan programs, financial assistance, and other services, visit www.sba.gov.

 

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.