SBA Lending Sets Another Record in FY 2014November 12, 2014
Last week, the U.S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet touted another lending record achieved by the agency in fiscal year (FY) 2014, approving 52,044 7(a) loans for $19.19 billion. Compared to fiscal year 2013 this equates to a 12 percent increase in the number of loans and a 7.4 percent increase in dollar amount.
The SBA 7(a) program was originally authorized for a $17.5 billion lending cap for FY 2014, but as it became evident that lending for the 7(a) loan program would surpass that amount, the agency secured an increase which was approved by Congress in the Continuing Resolution (CR) that passed in September.
Other SBA loans that showed positive figures within the last year were those $150,000 and under. Bolstered by the fee relief (zeroing out fees), which began at the beginning of FY 2014, the number of those loans increased 23 percent (30,675) and the approved dollars increased 29 percent ($1.86 billion). Subsequently fee relief for both loans $150,000 and under, and for Veterans Advantage was extended for another year.
FY 2014 also marked increases in loans to African Americans (by roughly 36 percent), Hispanics and women (by 14 percent for each group). Over the past year, the number of loans to exporters also grew by 3.7 percent and 12 percent in the dollar amount. Another SBA loan program that did well was the SBA Surety Bond Program which helps small businesses by providing essential bid and performance bonds to small contractors, allowing them to be more competitive when bidding on contracts with the government or the private sector. This 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 eight percent, from $1.262 billion in FY 2013 to $1.358 in FY 2014.
Access to capital for small businesses is critical and SBA lending programs play an integral role in helping to fill the gaps in a difficult lending environment. Since 2008, SBA has supported more than $126 billion in lending to more than 260,000 small businesses and entrepreneurs. In FY 2013, the SBA supported more than $29 billion (54,106 loans) in lending to small firms in its two main loan programs, 7(a) and 504, compared to $30.25 billion (53,848 loans) in FY 2012 and $30.5 billion (61,689 loans) in FY 2011. While the SBA has had success in recent years, more can be done to improve access to the financing small-business entrepreneurs need to start and grow their business and create jobs.