Follow the Dollars: A sampling of regional banks’ SBA loan numbers
The fate of the Fed's SBA loan
guarantee is still uncertain, but the
last year has been booming. The TCBN takes a look at the number of
SBA loans some regional banks made – and how much they gave.
REGION – Lamenting what they call a dearth of business lending right now, many small companies hope Congress will re-approve the Small Business Administration's beefed-up loan guarantee program.
The SBA has had an on-again, off-again program of special loan guarantees since early 2009, but its future was unclear at press time in late April. At that point, it was scheduled to be suspended at the end of the month. The program is designed to make it easier for banks to lend to businesses after the credit meltdown of late 2008.
Under the program, borrowers haven't had to pay loan fees in key loan categories as they once did. And the maximum guaranteed portion of a loan has been raised to 90 percent for certain types of lending. That has resulted in more SBA lending – often in higher amounts and with longer terms than in the past.
During the federal fiscal year that ended Sept. 30, 2009, businesses in Benzie, Grand Traverse, Kalkaska and Leelanau counties received a total of 62 loans totaling about $15.7 million. The figure for fiscal 2008 was 65 loans, totaling $14.3 million.
Business advocates may take heart that President Obama wants the program to be extended until Sept. 30. It has already been suspended and then re-funded (or re-started) a number of times since its inception last year.
Charles Owens, the Michigan director of the National Federation of Independent Businesses (NFIB), says a continuation of the SBA guarantees would be welcome. "When you look at the federal funds that have been put into the banking system, the money hasn't trickled down to the small business level as much as in other areas."
"Any help we can get is appreciated," he says. "But we still have to break through the logjam of credit outside of the SBA."
Owens says SBA-backed loans have traditionally supplied just a small fraction of the loans that small businesses need. So they can't possibly represent the entire answer to the current loan drought.
Many NFIB members are ready to start projects, he says. "They have orders, and they are hampered in their ability to expand their businesses and fill these orders because of credit."
To make matters worse, he says, many major lenders won't even consider loans to Michigan's manufacturing sector. He says it's being "red-lined" – a term sometimes used to describe how mortgage lenders refuse to make loans in poverty-stricken areas.
(See charts for overall amount and the number of loans over the past three years by banks active in the region. All figures are statewide. The data does not include a special type of loan, the 504, that is used to buy real estate and equipment at below market rates.)