SBA-backed lending approaches $17 million in Mesa County

Phil Castle, The Business Times

Dan Nordberg
Frances Padilla

The dollar volume of loans issued in Mesa County under a federal small business financing program nearly tripled during the 2019 fiscal year.

According to the Colorado District Office of the U.S Small Business Administration, 28 loans worth a combined $16,564,700 were issued under the SBA 7(a) guarantee program. Another loan worth $286,000 was issued under the SBA 504 program.

Three of the 7(a) loans worth a total of nearly $9.7 million accounted for more than half the dollar volume.

“To me, that’s a good indication you have a strong economy in Mesa County,” said Frances Padilla, director of the Colorado District Office of the SBA.

The Mesa County numbers were part of more than $837 million in 7(a) and 504 loans issued statewide during the 2019 fiscal year.

The Colorado economy remains one of the strongest in the nation, Padilla said. “We believe the SBA’s tailored small business lending programs continue to help start, grow and expand businesses when needed.”

Dan Nordberg, administrator of a six-state SBA region that includes Colorado, said the lending programs play a role in promoting the economy. “The SBA is building a more favorable environment for entrepreneurship and innovation across Colorado, and is helping entrepreneurs with the tools they need to start, grow and expand their businesses. I’m particularly proud of the work we’ve done to better assist underserved areas in both rural and urban communities.”

The SBA doesn’t make direct loans through the 7(a) general business loan guarantee program or 504 program to finance land, buildings and equipment. By guaranteeing repayment on a portion of the loans, however, the agency enables lenders to extend financing to businesses that might not otherwise qualify under conventional terms.

In Mesa County, the total dollar volume for loans backed under 7(a) program during the 2019 fiscal year was almost triple the
$6 million backed in the 2018 fiscal year.

Three large loans accounted for more than half the dollar volume of 7(a) lending during the 2019 fiscal year, including a loan for almost $3.4 million issued by First Colorado National Bank, a loan for nearly $3.3 million issued by Live Oak Banking Company and a loan for more than $3 million issued by Bank of George.

With just the one loan, First Colorado National Bank was the largest 7(a) lender in Mesa County. U.S. Bank issued the most loans — eight worth a total of $238,000.Wells Fargo issued five loans worth a total of more than $2.5 million.

Colorado Lending Source issued one loan in Mesa County under the 504 program for $286,000.

A total of 36 loans were issued under the 7(a) program in neighboring Western Colorado counties during the 2019 fiscal year — 17 worth a total of $4.1 million in Garfield County, 15 worth a total of $8.4 million in Montrose County and four worth a total of $358,600 in Delta County.

Five loans worth a total of $1.8 million were issued under the 504 program in Garfield County.

Statewide, the SBA backed 1,297 loans worth a combined $700 million under the 7(a) program and 146 loans worth a collective $137.4 million under the 504 program.

It’s estimated those loans helped small businesses create or retain nearly 13,000 jobs.

Lending numbers are down from the 2018 fiscal year, however. Padilla said 7(a) lending tends to dip in a growing economy because small businesses can access capital under traditional terms or rely on cash flow for operations.

Wells Fargo remained the top 7(a) lending in Colorado in issuing 209 loans worth a total of more than $83.1 million. Colorado Lending source remained the top 504 lender in issuing 112 loans worth a total of $94 million.

Microlenders, including the Colorado Enterprise Fund and Community Enterprise Development Services, provided 169 loans valued at a total of more than $2.38 million.

Padilla said she’s proud of ongoing efforts to ensure access to small business financing is available not only in urban areas of Colorado, but also rural areas. That includes the Western Slope. There are opportunities to work with the U.S. Department of Agriculture Rural Development and other federal and state agencies to promote economic development, she said.

Nationwide, the SBA backed 52,000 loans worth a total of nearly $23.2 billion under the 7(a) program and more than 6,000 loans worth a combined total of more than $4.9 billion under the 504 program.

The numbers were down for the 7(a) program, but up for the 504 program, which offers fixed interest rates for longer terms.