Connecting the dots: SBA-backed lending increases in pandemic

Phil Castle, The Business Times

Dan Nordberg
Frances Padilla

A federal agency backed nearly $82 million in lending in Mesa County during the 2020 fiscal year under the provisions of a program intended to offer businesses support in the midst of a pandemic.

According to the Colorado District Office of the U.S. Small Business Administration, 2,751 loans worth a combined $81.7 million were issued in Mesa County under the Paycheck Protection Program. Two more loans worth a total of more than $2.3 million were issued under the SBA 504 loan program.

The numbers don’t include loans issued under the SBA 7 (a) guarantee program because county by county breakdowns weren’t available.

Statewide, more than 165,000 businesses used PPP and disaster support loans. A total of 1,514 loans worth a combined $870 million were issued through the 7(a), 504 and microlending programs.

“The SBA played a monumental role in supporting small businesses impacted by the COVID-19 pandemic, evidenced by the thousands of Paycheck Protection Program and Economic Injury Disaster Loans approved to urban and rural Colorado businesses since March,” said Dan Nordberg, administrator of a six-state SBA region that includes Colorado.

“The SBA’s historic lending achievement is a testament not only to the dedicated public servants within the agency, but also to the grit of small business owners and entrepreneurs across the state,” Nordberg said.

Frances Padilla, director of the Colorado District Office of the SBA, said lending activity during the 2020 fiscal year indicates small businesses need access to capital and her agency plays an important role in providing that access.

“Every day, small businesses continue to show their fortitude through challenging conditions,” Padilla said. “The SBA is focused on providing the support needed. We remain committed to ensuring our state’s more than 655,000 small businesses have access to the programs and resources available.”

In Mesa County, 2,751 businesses received a total of nearly $82 million through the Paycheck Protection Program created under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The program offered loans of up to 2.5 months of payroll for a business. Repayments on the portion of loans used for payroll will be forgiven if staffing levels as measured by the number of full-time equivalent positions at the time of application remained the same on June 30.

Two loans worth a total of more than $2.3 million were issued in Mesa County under the SBA 504 loan program to finance land, buildings and equipment.

Information about the number and amount of loans issued under the SBA 7(a) program weren’t available on a county by county basis for the 2020 fiscal year.

The SBA doesn’t make direct loans through the 7(a) and 504 programs. By guaranteeing repayment of a portion of  the loans, however, the agency enables lenders to extend financing to businesses that might not otherwise qualify under conventional terms.

The Colorado District Office of the SBA backed 1,514 loans worth a total of more than $870 million through the 7(a), 504 and microloan programs during the 2020 fiscal year. That’s a 3.8 percent increase over the previous year.

Nationwide, 5.2 million PPP loans worth a total of more than $525 billion were issued. Economic injury disaster loans accounted for another $191 billion, while $20 billion in advances were issued through that program.

The SBA backed about 42,000 loans worth a total of more than $22.5 billion under the 7(a) program. More than 7,000 loans worth a combined $5.8 billion were issued under the 504 program. In addition, 5,800 loans worth a total of nearly $85 million were issued under the microloan program.

Of the totals for the 7(a) and 504 programs, $7.5 billion went to minority owned businesses, $3.2 billion went to women-owned businesses and nearly $835 million went to businesses operated by military veterans.

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

“SBA’s small, but dedicated, team of professionals punched far above its weight this year,” Carranza said.