Small Business Administration Lended $30 Billion in FY18
This week the U.S. Small Business Administration (better known simply as the SBA) announced that it had offered entrepreneurs more than $30 billion in guaranteed loans during their 2018 fiscal year. As the Administration notes, this amounts to thousands of small businesses receiving capital that they would otherwise not have access to. Moreover both the SBA’s 7(a) and 504 loan programs saw high-performance levels in FY18 while their Microloan and Community Advantage Programs reached record levels of lending.
Making up the bulk of SBA loans granted during the fiscal year were 7(a) loans, which are for up to $5 million to purchase things like equipment or land or to use as working capital. During FY18 60,353 7(a) loans applications were approved, amounting to $25.37 billion. Meanwhile the SBA’s 504 loan program granted 5,874 loans for a total of $4.75 billion. The 504 program aims to help business owners acquire the financing necessary to purchase fixed assets, with the SBA providing 40% of the total cost, a participating lender covering up to another 50%, and the borrower contributing at least 10%.
In a press release announcing the fiscal year loan results, SBA Administrator Linda McMahon said, “We are providing tools, resources and access to capital for America’s 30 million small businesses, and our FY18 numbers bear that out.” McMahon continued, “SBA’s 7(a) and 504 loan programs have never been more dynamic, easy to use and accessible—helping small businesses succeed and thrive. Our loan programs in FY18 continue to show strong performance, and we believe the President’s tax cuts and deregulatory actions will help more small businesses grow and prosper in the coming year.”
As mentioned, the SBA also saw growth among their small loan options. The Administration reports that 5,000 loans were approved under their Microloan program, totaling $72 million. Additionally 1,000 loans amounting to $150 million were issued as part of the SBA’s Community Advantage program. These figures represented records in terms of dollars lent between the two initiatives.
Between this announcement and the recent news that small business loan approval rates among banks continue to rise, it’s clear that entrepreneurs now have multiple options in terms of obtaining the capital needed to grow their businesses. Although it’s been mentioned so many times before, one can’t but note that this lending-friendly environment is surely playing a factor in the record optimism that’s been expressed by small business owners in recent months. Following a tremendously prosperous 2018 fiscal year, hopefully both the U.S. SBA and the small businesses they serve can continue to see success in FY19 and well beyond.