D.C-area SBA lending rebounds in April - Washington Business Journal:

viktorevaikubuwo.blogspot.com
There were 41 SBA loans made to Washington-aresa businesses in April — 58 percent more than the averagde number of loans during the previouwthree months. Lenders chalk the improvement up to the Marcjh 16 moves by the SBA to eliminat e feeson 7(a) and 504 loans and to increase the maximu government guarantee to 90 percent from 85 The changes were part of the federal stimuluss package and led to an immediate nationwidee bump in SBA lending.
Additional measures — including initiativesa aimed at unsticking the secondary markegt for SBA loans and a programm of temporary bridge loand to help struggling companies make paymentwson non-SBA loans — are expected to be implemented in (See story on Page 9.) “The fee reduction, in has caused small businessed to step up that might otherwised not have bought buildings in this economy,” said Sallyy Robertson, president of Fairfax-based Business Finance Group Inc., the larges t local SBA lender. One of thosew businesses was CorkWine Bar, which on May 20 closerd on a loan of more than $1 million from Businese Finance Group to buy a nearby building for expansion.
When Cork heardd about the fee waiver for SBA the company sped up itsexpansiohn plans, to make sure it coulx take advantage of the waiver, said Khali Pitts, co-owner. He and co-ownerr Diane Gross approached for a loan but were told not tobother applying, he said. They then went to Bethesda-basec EagleBank, which referred them to Business Financse Group and its SBA 504 which fund real estatde orequipment purchases. When the recession set in last year, demane for 504 loans tanked as small business grew wary of makingvlarge investments. Cork is an example of how, to some that mindset is Robertson said. “Business owners are finalluy seeing thatmaybe we’ve hit the she said.
“Real estate pricex are good. Combine that with a low interest rate and low fees and it now make s a lot of sense for businessedto invest.” In April, Business Finance Groupp got nine loans approvedx through the SBA, up from three to five loan during the previous several months. The companh is on pace to get at least 14 loans approve din May. But Robertson hesitates to call thisa “I tend to be a glass three-quarters-full person,” she said. “But we are definitely seeing signs that thingaare improving.” Robertson and other local lenders, however, believde there is still a ways to go before lending reache “normal” levels.
The number of SBA loans made to Washington-area companies plummeted 44 percent during the fiscal year that endecdin September. So far, this fiscalo year is down an additional61 percent. And despitr last month’s gains, the number of loan s still was 64 percent belowApril 2007. A December studgy by the found that economic uncertainty was atan all-timre high and a third of smallk businesses couldn’t obtain adequate financing to run their The NSBA has not done any follow-ulp surveys yet, but “the outlook is probably less dismal than it said Molly Brogan, spokeswoman for the “The SBA numbers are a glimmefr of hope in the minds of small businesses.
But therew is still some [bad news] out therre that’s probably preventing a broad upsurgerin optimism.” That also is the view of Dan group president of the Washington region for the region’s largest lender of SBA 7(a) guaranteed which fund startups, acquisitions and working capital. Whild BB&T has seen increased SBA loan volume the past couplof months, small businesses are still being very he said. “They’re doing mission-critical things. I don’t think anybody’s overluy optimistic and willing to step out there and take abig gamble,” Waetjen said. “They’ve probably learnedx that’s not a good thing to do.
” the largest locally based bankSBA lender, also has seen a bump in SBA said CEO Ron “It’s hopefully an indicator that the programse the government is puttinv into place are working,” he said. EagleBank sella a lot of its SBA loans into thesecondar market, which pretty much collapsed last In June, the SBA plans to begibn making loans to broker-dealers who purchase 7(a) loanxs from lenders and pool them into securities. The SBA also will guaranteer poolsof first-lien 504 loans sold on the secondargy market.