The U.S. Small Business Administration approved a record number of loans this year, lending out $19.19 billion through its 7(a) Loan Program. By the end of the fiscal year on Sept. 30, the SBA had approved more than 52,000 loans, a year-over-year increase of 12%. In terms of dollars loaned, the program was up 7.4% over 2013.
“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,” said Maria Contreras-Sweet, SBA administrator. “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.”
The SBA’s 7(a) program is designed to provide small businesses with the most comprehensive type of financial assistance to cover most expenses, such as short- and long-term working capital, exports and refinancing existing debt under certain conditions. The SBA had only been authorized to loan $17.5 billion in 2014, but was able to secure an increase to the program in mid-September when it became clear that lending would exceed that amount.
Other SBA loans that thrived this year were those for $150,000 and under, which saw a 23% increase in number over 2013, spurred by the fee relief implemented at the beginning of the year. More than 30,600 small loans were disbursed in 2014, for a total of $1.86 billion, compared to roughly 25,000 loans for a total of $1.44 billion in 2013. Veterans also benefited from fee relief on loans from $150,000 to $350,000. Both fee relief programs have been extended through fiscal year 2015, according to the SBA.
The 2014 SBA loans also reflect increases in diversity, with a 36% increase in the number of loans to black business owners and a 14% jump for both Hispanics and women.
SBA loans are channeled and managed through lending partners across the country. The SBA reports that in 2014 it added 308 new lenders, which collectively made 684 loans for nearly $317 million.