Inland Empire, CA – Activity for SBA-backed loans in Orange, Riverside, and San Bernardino counties has picked up significantly from its 2009 levels, according to data from the Santa Ana District Office of the U.S. Small Business Administration. From October 1st, 2008 to July 31st, 2009, 821 loans were made for a total of $312,339,300. From October 1st, 2009 to July 31st, 2010, 1153 loans were made for a total of $530,859,300. This represents a 40% increase in the number and a 70% increase in the dollar amount of loans to small businesses in fiscal year 2010 year to date compared to the same period in 2009.
“Making sure that small businesses have adequate capital to grow and create jobs to lead us out of this recession is a top priority of the SBA,” remarked District Director Adalberto Quijada.
Two provisions in the American Recovery & Reinvestment Act (ARRA) pertaining to SBA lending are credited for much of this increase. The guaranty increased from 80% to 90% and fees were eliminated for most SBA loans, alleviating some of the risk for lenders and reducing the cost to borrowers. However, these provisions expired in June and a queue remains in effect for businesses seeking SBA loans with these enhancements.
SBA continues to seek authority and funding to resume making loans under the ARRA provisions. From February 17, 2009, when ARRA was signed into law, average weekly dollar volume for SBA-backed loans rose by more than 90% in the 7(a) and 504 programs compared to the weekly average before the passage of ARRA. This supported more than $29.4 billion in small business loans nationwide, including $1.1 billion to businesses in the counties of Orange, Riverside, and San Bernardino.
The 7(a) loan program is SBA’s primary vehicle to deliver capital to cash-strapped existing businesses and start-ups. Under this program, proceeds can be used for working capital, expansion or renovation, new construction, to purchase land or buildings, leasehold improvements, as a seasonal line of credit, or for inventory.
SBA’s 504 loan program is for long-term fixed assets, to include commercial real estate and equipment with a lifespan of more than 10 years. Under this program, a business owner can receive financing of up to 90% for qualifying assets.
The most active lenders in the Santa Ana District are Wells Fargo with 126 loans; CDC Small Business Finance with 116 loans; JPMorgan Chase with 101 loans; Superior Financial Group with 71 loans; and Southland Economic Development Corporation with 53 loans.