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Small Business Administration lending momentum continues in FY18

| October 26, 2018 1:00 AM

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McMahon

SEATTLE — The U.S. Small Business Administration (SBA) Seattle District Office — serving Washington and North Idaho — announces FY18 lending numbers showing that it guaranteed more than $905 million to small businesses that otherwise would not have had access to capital. Nationally, SBA loan volume in FY18 reached more than $30 billion.

“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.”

During FY18 there were approximately 1,600 7(a) loans made in the SBA Seattle District, 60,353 nationally. The total dollar amount of 7(a) loans in the SBA Seattle District was $797.7 million and $25.37 billion nationally.

The 7(a) program is SBA’s flagship program, which offers guarantees on loans to small businesses up to $5 million on reasonable terms and conditions. 7(a) loans are commonly used for acquiring land, purchasing equipment, or working capital.

The SBA’s 504 loan program had another year of high performance for lending, with 136 loans in the SBA Seattle District made for a total dollar amount of $107.7 million. Nationally, 5,874 loans made for a total dollar amount of more than $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, more than 1,000 debentures had been sold by the end of September.

“The 25-year Debenture is designed to help free up cash flow and offer fixed rates in a rising interest rate environment for 504 borrowers and we are pleased to see over $1 billion has been disbursed in less than six months,” Associate Administrator for SBA’s Office of Capital Access William Manger said.

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 in the SBA Seattle District, 60 loans were approved for more than $802,000 in the Microloan program and 13 loans for more than $2 million in SBA’s Community Advantage program.

Nationally, more than 5,000 loans were approved for more than $72 million in the Microloan program and more than 1,000 loans for more than $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 SBA lenders and more than 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 a more than 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 more than 21 percent in 7(a) and 504 dollars going to franchises.

The SBA has also made a priority to reduce loan processing time to get financing to small businesses as quickly as possible. Since 2017 — for loans more than $350,000 — the SBA has reduced processing time from 15 days to eight days. And for small business loans less than $350,000, the reduction has gone from six to three days.

“As lending momentum continues for our dynamic region, we are setting our sights on rural communities that need improved access to capital,” SBA Seattle District Director Kerrie Hurd said. “Half the counties in Washington and northern Idaho are considered rural so we are working with lenders throughout our district to connect entrepreneurs in smaller communities with the financing they need to grow and thrive.”

Finally, the SBA is working to provide more access to financing in rural communities across Washington and northern Idaho. Currently, the SBA offers fee relief on 7(a) loans up to $150,000 in rural counties as defined by the U.S. Census.

“Access to capital is a critical need for every small business owner. Whether it’s $500 or $5 million, SBA loan programs connect Pacific Northwest entrepreneurs with financing unavailable to them conventionally,” SBA Pacific Northwest Regional Administrator Jeremy Field said. “SBA staff across the region collaborates with lenders, resource partners and business organizations to connect small town and rural businesses with the resources they need to start and grow.”

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