SBA-backed lending “strong” in FY 2012

Lending activity reached record and near-record levels nationally during the 2012 fiscal year under two programs backed by the U.S. Small Business Administration.

The SBA reported that nearly 54,000 loans worth a total of more than $30.2 billion were approved during FY 2012, which ended Sept. 30.

Nearly half the dollar amount was approved under the 504 program in what was a record year for loans issued to finance land, buildings and equipment. The other half was approved through the 7 (a) general business loan guarantee program The overall dollar amount was the second largest in history for the SBA, surpassed only in FY 2011.

“Reaching such strong numbers is a clear sign that both the business and lending communities are regaining confidence in the economic climate of the country,” said SBA Administrator Karen Mills. “It means that the credit markets are increasingly willing to help small businesses establish themselves, grow and create new jobs for Americans.”

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

Almost 9,500 loans worth a total of nearly $15.1 million were approved though the 504 program. A provision of federal legislation allowing the use of 504 loans for refinancing accounted for 26 percent of the loans.

Almost 45,000 loans worth a collective $15.15 billion were approved through the 7 (a) program.