Leading Colorado lender: SBA financing activity up

Phil Castle, The Business Times: 

Financing activity under federal small business loan programs held steady in Colorado through the first half of the year, according to numbers from a leading lending organization in the state.

Colorado Lending Source was involved in issuing 121 loans through the first six months of the year, 10 more than the same span last year.

China Califf, marketing manager for Colorado Lending Source, said more banks are becoming involved in U.S. Small Business Administration lending programs to meet the needs of business owners who’ve become “less nervous” about seeking financing to start or expand their ventures.

Eighty loans with which Colorado Lending Source was involved during the first half of the year were issued under the SBA 504 program to finance land, buildings and major equipment purchases.

Colorado Lending Source is among the certified development companies in Colorado that join with banks in issuing 504 loans. In the 2010 fiscal year for the SBA, Colorado Lending Source ranked first among those companies in issuing 146 loans worth a total of nearly $78.3 million.

Another 40 loans issued during the first half of the 2011 calendar year involved the SBA 7(a) general business loan guarantee program.

Colorado Lending Source doesn’t issue 7(a) loans, but assists lenders and borrowers with the application and approval process, Califf said. While large banks have staffs familiar with SBA loan programs, many of the smaller community banks becoming involved in the programs don’t.

In the first half of 2010, Colorado Lending Source issued 77 loans under the 504 program and assisted with another 34 loans under the 7(a) program, she said.

Califf attributed the increase in those numbers in the first half of 2011 to more interest from lenders in SBA financing. That interest continued through the summer, she added. “There were a lot of calls and activity.”

Federal government guarantees for 504 and 7 (a) loans allow lenders to extend financing to businesses that might not qualify under more conventional terms, she said.

There’s also been more interest in SBA loans from borrowers who’ve become less cautious about financing startups and expansions, she added.