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Columbia Business Monthly

South Carolina SBA Small Business Lending Momentum Continues

Oct 18, 2018 10:42AM ● By Kathleen Maris

The U.S. Small Business Administration announced FY18 lending numbers showing that it guaranteed more than $30 billion to small businesses that otherwise would not have had access to capital. More than $349 million was guaranteed to South Carolina small businesses.

In FY18, there were a total of 695 loans made in South Carolina, a 16.6 percent increase compared to FY17’s total of 596 loans. The dollar amount of loans guaranteed had a slight decrease of 10 percent from last year’s total of $389 million.

“The increase in the number of loans SBA has guaranteed to South Carolina businesses shows that more entrepreneurs were able to receive funds to start, grow, or expand their small business,” said Gregg White, district director of the SBA South Carolina District Office. “The decrease in the loan volume means that we are approving smaller loans. Our loans go up to $5 million, but your typical small business does not need that much capital. This shows that we are reaching the businesses that are just starting or need a little extra to take their business to the next level.”

One way small loans are made is through the SBA’s microloan program, which works with partnering lenders, community development organizations, and micro-lending institutions to provide loans less than $50,000. This program expanded rapidly in FY18 for South Carolina, resulting in a 114 percent increase in microloan volume across the state.

“We are providing tools, resources, and access to capital for America’s 30 million small businesses, and our FY18 numbers bear that out,” SBA Administrator Linda McMahon said. “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.”

Nationwide, there were approximately 60,353 7(a) loans made, with a total dollar amount of $25.37 billion. The 7(a) program is SBA’s flagship program, which offers guarantees on loans to small businesses of up to $5 million on reasonable terms and conditions. 7(a) loans are commonly used for acquiring land, purchasing equipment, or working capital.

The SBA’s 504 loan program had another year of high performance for lending, with 5,874 loans made for a total dollar amount of more than $4.75 billion. In FY18 SBA launched the 25-year Debenture, which offers an extra 60 months of financing at a fixed rate for small businesses. Since its introduction in April, more than 1,000 debentures had been sold by the end of September.

“The 25-year Debenture is designed to help free up cash flow and offer fixed rates in a rising interest rate environment for 504 borrowers and we are pleased to see more than $1 billion has been disbursed in less than six months,” Associate Administrator for SBA’s Office of Capital Access William Manger said.

The SBA continued to innovate and improve processes by leveraging enhanced technologies. Lender Match is an SBA technology platform that gives entrepreneurs the ability to complete a quick online form, without registration or cost, and be connected with an approved SBA lender within 48 hours. To date, Lender Match has generated 3.6 million leads on behalf of small businesses to our lenders and more than 160,000 unique borrowers have been contacted by lenders with financing options.

Another technological innovation was the development of the SBA’s Franchise Directory, which was launched this year and has resulted in a more than 50 percent increase in eligible franchise brands. There are currently 3,192 brands on the Franchise Directory. When the directory was first published in October 2017 there were only 2,034 brands. In FY18, SBA has seen a year over year increase of more than 21 percent in 7(a) and 504 dollars going to franchises.

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