Author Archives: Charles Green

SBA Loans to Minorities Grew 28% Since FY 2009

By Charles H. Green

Each week the U.S. Small Business Administration publishes information about the loan volumes it has approved for participation through either the 7(a) loan guaranty program  or the 504/CDC loan program. This information tracks the dollar and numerical statistics of approved financing volumes throughout the SBA’s fiscal year, which starts on October 1 annually, as well as demographic information of the small business owners that benefit.

SBFI has been tracking this loan approval data over the past year to develop trend SBFI_moneytreeanalysis, and as part of that effort, has been developing graphical illustrations to map trends in the various demographic categories that are tracked by the SBA. While we follow overall loan approval volumes monthly, for the demographic categories, the information is compared year-over-year. Hopefully, you’ve already seen some of these results in our Capital-Views pages, where SBA loan approvals for rural, veteran and women borrowers have been illustrated.

This time our attention is turned to the distribution of SBA loans to minority borrowers, and learning more about how they have been trending over time.

As a group, minority business owner’s SBA participation has grown since 2009 from 32% of all SBA loans to over 41% in FY 2014, a 28% gain. But this growth has varied widely within different ethic categories, as those as “Asian” rose from 16.3% of the total dollar sum of SBA loans in FY 2009, to 20.5% of SBA loans in FY 2014. During those same years, “Black” business owner’s share of SBA loans fell from 4.7% to 1.7%, while “Hispanic” business loans rose from 4.6% to 5.4% during the same period.

Certain categories were combined in our analysis due to space limitations and relative low reported lending volumes in these categories. For example, ‘Hispanic’ and ‘Puerto Rican’[i] categories were combined into one “Hispanic” category; ‘American Indian,’ ‘Eskimo or Aleut,’  ‘Multi-Group’ and ‘Undetermined’ categories were combined into “Other.”

In FY 2009, the “Other” category represented 7% of all SBA loans, which rose to 13.7% by FY 2014. The largest sub-category in our combination was “Undetermined,” which may have reflected a growing number of borrowers who refused to disclose their ethnicity, or participating lenders that did not gather the information.

Read more at Capital-Views.

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[i] Apparently the SBA made this same combination of Hispanic and Puerto Rican borrowers, since FY 2009 is the only year that approved loan balances are reported.

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Technology Revolution in Finance is Upon Us

By Amaresh Gautam

Technology has changed our life in remarkable ways. Can you imagine waking up in America 100 years ago, in a house without a computer, smart phone, internet connection, microwave or even a refrigerator to store fresh food in from the field? For that matter, imagine milking a cow in the morning to have fresh milk! But one sector that hasn’t been exactly revolutionized by technology is finance.

Sure, they now have your data backed up on systems rather than in filing cabinets and they In-Depth Analysisuse sophisticated software, but the basic banking products really haven’t changed that much. Savings account and demand deposit accounts offer the same kind of benefits they did 100 years ago. Most of the innovation in finance has been incremental at a snail’s pace, rather than disruptive, and it’s only been in the most recent two or three years that financing innovations have really begun.

This recent wave of innovation is finally taking hold in finance, with new startups coming up with financial products that are technology enabled, like payments applications and lending platforms. And don’t worry that these unlikely products/services will make banks go out of business. In fact many of these new products will be complimentary to traditional banking offerings and will increase their market, as they affect the financial landscape in multiple ways.

First, these innovators will cut costs and improve the quality of financial services. These cost savings will be passed to the customers thus setting new expectations. Second, these new players will have data driven and technologically enabled ways of assessing risk. For example usage of social media reviews, machine learning and the track record of using vendors can all be used to arrive at some sort of credit score. Third, by adding diversity in distribution to the lending landscape they will make it more stable.

With this business model centered in a technology-enabled channel, financial firms are likely to be much less geograhically concentrated than the business of brick and mortar firms. Moreover they are likely to avoid two risks of traditional financial institutions–mismatched maturities and leverage.

If these technology companies succeed in becoming bigger than the traditional institutions, finance will be transformed in a major way. Borrowers and lenders would be matched directly using technology and leverage in economy would be greatly reduced. But before that happens, technology companies will force traditional institutions to cut costs, and the clients will emerge as the winners.

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Tightening Ahead by the Fed–What Past Says About Future

By Charles H. Green

According to economist Kevin Kliesen, there’s a high likelihood that the Federal Reserve will begin its interest rate normalization process sometime in 2015, but to be certain, that decision will ultimately depend on the data and resulting economic forecasts. As a means of trying to understand what to expect, he suggested reviewing previous tightening cycles employed by the Fed may reveal evidence about what effects lie ahead.

Kliesen is Business Economist and Research Officer at the Federal Reserve Bank of St. Treasury Yield Curve After NormalizationLouis, and spoke before an audience gathered for the second quarter economic forecast presented by the Robinson College of Business at Georgia State University recently.

It’s widely known that the Fed removed the word ‘patience’ in it’s March statement concluding the FOMC meeting, which had been used at end of QE3 program as an expression of the pace they expected to proceed. However in March, Fed Chair Janet Yellen remarked that conditions “may warrant an increase in the fed funds rate target sometime this year.”

Historically the Fed’s decision to raise rates has always been more difficult than lowering rates and is always debated intensively. Former Fed Chair Arthur Burns described it as the anguish of the central banking, how raising rates evoked violent criticism. Yet more often, the Feds are accused of favoring the financial markets at the expense of the public and savers.

The Fed’s debate usually plays out through speeches offering various viewpoints of the twelve district presidents, all of which are monitored intensely. In their April survey, the majority (74%) of Blue Chip forecasters expected a rate increase in September, a major revision from the January survey when 65% believed that rates would rise in June.

Why all the uncertainty? It seems as though the data is not cooperating. As more data is collected, any decision to raise the Fed funds rate seems to be pushed farther out, indicating that both the Fed’s and private forecasts have been too optimistic. Inflation has continued to be much weaker than expected. But recall Chair Yellen’s remark earlier this year: “Don’t wait for the 2% inflation target.”

History suggests that monetary policy makers have stayed ‘too easy’ too long in the past. With as many economic factors affected by monetary policy–such as spending on interest-sensitive goods, bank lending, corporate balance sheets, household net worth and asset prices,–it’s easy to understand how the macro economy can be heating up faster than traditional economic factors can track.

In previous cycles, rate tightening always exceeded the market’s expectations, particularly during 2004-2006 (+4.25%), which carries its own risks and exposure. Normally, credit risk spreads and stock prices fall early in the cycle, with risk spreads rising later. But it takes about a year for industrial production and consumer spending to fall off. And in three of the four last cycles, it took about a year for the Treasury rate yield curve to to invert.

Net effect: the year following liftoff of the normalization, the economy generally improves, followed by slower growth later.

And it’s worth noting that Kliesen related that “history suggests that long expansions with low inflation tend to have smaller increases in the Fed’s policy rate, so keeping inflation low and stable is key. But history also suggests that each tightening cycle depends significantly on underlying economic conditions, and oil shocks have been important in the past.”

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Economy Will Grow in 2nd Quarter: Dhawan

By Charles H. Green

Real GDP grew at a paltry 0.2% for the first quarter of 2015, but economist Rajeev Dhawan doesn’t think the factors that drove this stagnation are here to stay. “After I read the GDP report, the word WOW escaped my lips,” Dhawan said. “WOW here stands for weather, oil and the world economy. The report showed clear damage from these three factors.”

Dhawan heads the Economic Forecasting Center at Georgia State University in Atlanta, Rajeev Dhawanand spoke before an audience gathered for the second quarter economic forecast presented by the Robinson College of Business on Wednesday.

It was unusually cold Northwest weather that drove nondurable goods consumption growth down to negative 0.3% (especially grocery purchases) in the first quarter, but on the flip side, spending on utilities (heating) rose. Conversely, overall gasoline savings were socked away into savings accounts, denying the previously forecasted upswing in consumer spending.

Dhawan predicted that the weather factor is temporary, except for the drought being experienced in the West, but in any case, the low oil prices will start to creep upward again as U.S. fracking production declines. “We’ve almost reached the bottom, with oil rig counts having dropped sharply with only a little bit to go,” said Dhawan. “But prices will not reach the heights of $120 a barrel anytime soon. I expect oil to start creeping up to $70/barrel by year’s end and stay in that range for the coming year.”

Dhawan Expects Economy to Bounce Back in Second Quarter

The world economy is facing problems on two fronts: First, China’s economy has failed to recover after a planned slowdown to curb inflation, affecting many emerging economies because of their supply chain connections. Second, the Eurozone is strangely experiencing negative government bond yields, due to the repeated threats of Greece’s exit from the Eurozone, during the trillion dollar bond-buying program (quantitative easing) of the European Central Bank.

Overall, these issues played out with a 7.2% decline in early 2015 exports. “The three WOW components shaved off close to 2.5% of U.S. growth in the first quarter,” Dhawan said. But, he asserted that these negative effects can be offset as the country rebounds in the second quarter.

“Weather is a temporary factor. As the seasons progress, it will soon reverse course and add to nondurable consumption. Most of the numerical damage to the GDP is now behind us,” said Dhawan.

Another side effect of the stagnant first quarter GDP results is the delay in a potential Federal Reserve interest rate hike.  “Oil, the global economy and investment should have stabilized by the end of October,” Dhawan reported. “This means that December is the earliest the Fed can raise rates.”

Highlights from the Economic Forecasting Center’s National Report

  • Following a gain of 2.4% in 2014, real GDP grew at a stagnant 0.2% in the first quarter of 2015. Growth of 3.3% is expected for the second quarter, bringing the overall rate to 2.5% for 2015. It will expand at a better rate of 2.8% in 2016 and grow 2.7% in 2017.
  • Business investment will grow a weak 3.2% in 2015, recover to 5.8% in 2016 and 6.4% in 2017. Expect jobs to grow by a monthly rate of 254,000 in 2015, 240,000 in 2016 and 232,000 in 2016.
  • Housing starts will average 1.107 million units in 2015, rise to 1.194 in 2016 and 1.253 in 2017. Expect auto sales of 16.8 million units in 2015, 16.9 in 2016 and 17.1 in 2017.
  • The 10-year bond rate will average 2.1% in 2015, and should rise to 3.3% before the end of 2017.

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Want to Be Rid of a Client? Four Sure Ways to Run Them Off

By Charles H. Green

Successful commercial lending depends on a healthy relationship between lender and client. That’s not to say you’re getting into a new “BFFL” every week, but rather there’s a mutual respect and informal set of boundaries that form a working arrangement that you will maintain while evaluating a funding opportunity. Often these relationships kick off with an upbeat meeting that is pure business bliss: they are highly qualified, successful and ready to sign the line you place before them.

But a month later, they’re a little slow returning your call; the comprehensive list of data Bad Loan Officeryou scurried to deliver only came back with about half of what you need. And then the company’s name is mentioned at an industry meeting, and one of your competitors suddenly sounds very familiar with someone you thought you had a lock on.

How do you react? Are you disappointed? Mad? Indifferent?

The latter is not a good sign, since you probably have a budget to meet, and time is money. The effort you put into this client may have already exceeded the time you normally go through to closing. Mad? That’s not a good frame of mind to make decisions from; besides, if you can get totally honest with yourself, you would be mad at yourself much of the time anyway.

Disappointment may be easier to address. The truth may be that you need to think about ‘relationships’ in a different light, and study how well you perform your part of the deal.

In business, recognize that you enter most relationships with a glaring conflict. Borrowers want your money at the lowest price, for the longest terms, and without any restrictive covenants that limit what they can do.

Lenders want the money back as fast as possible for a top-tier rate of return, with as many junk fees as they can add on, and with enough collateral to liquidate the loan 2-3 times.

But ‘conflict’ itself is not a problem. Conflict is actually a normal and productive part of a relationship where two parties with different needs and interests work together. In fact, the amount of conflict between two parties has no bearing on the success of the relationship, but rather it’s how conflict is handled that determines a relationship’s success.

The following four characteristics illustrate some relationship flaws that occur as some lenders try to manage the inherent lender/borrower conflict:

Criticism – Sometimes borrowers hand you garbage in response to your request for information. In responding to that reality, especially during a time where you are under other pressures, it can go from offering constructive feedback–or otherwise seeking to improve the status of the situation–to criticism. Criticism focuses on the individual’s  character or abilities, rather than the specific action you’d like to see changed.

For example, compare “You run a business and don’t know what a balance sheet is???” vs. “This format doesn’t meet our requirements; is there someone who can prepare the financial according to generally-accepted accounting principals?”

It’s one thing to criticize the person without being constructive; it’s another to go after what you want to be changed, and save the ‘foot-stomping’ for another day.

Contempt - Contempt is the open disrespect toward another and often involves comments that aim to take the other person down a notch, or includes direct insults.  It can also be seen in veiled forms, such as rolling of the eyes and couching insults within “humor.”

Commercial lenders that don’t respect their clients need to pass them on to someone else.

Defensiveness – We all react to someone else’s accusations or blame with a degree of defensiveness, and I can’t count the number of loan applicants who took 90 days to provide their requested documentation, and expected a loan decision in 24 hours!

But denying responsibility, making excuses, meeting one complaint with another, and other forms of defensiveness are problematic, because they prevent a conflict from reaching any sort of resolution. Defensiveness only serves to accelerate the anxiety and tension experienced by both parties, and this makes it difficult to focus on the larger issues at hand that need to be resolved.

Be watchful about your own defensiveness, while trying to diffuse the applicant’s, instead of letting it escalate a disappointment into a disaster.

Stonewalling – Sometimes the easiest way to deal with a loan applicant’s questions that you’re not ready to answer is to simply ignore them. Sometimes your borrower does it too, but you both know that’s bad manners and bad business.

The key to overcoming stonewalling is to participate in the discussion. If you’re stonewalling because the circumstances make you anxious about confronting applicant, or you are overwhelmed elsewhere, let the other person know how you’re feeling and ask for some time to think before continuing the discussion.

If you stonewall as a matter of practice, you need to realize that participating in discussions and working together to resolve conflict are the only ways to keep your relationships from crumbling.

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It’s All About Incentives, the Rest is Just Commentary

By Amaresh Gautam

That people respond to incentives is one of the most fundamental economic principles. A correct incentive system for employees can be the difference between a successful and a failed business enterprise. An incorrect incentive plan for the C-Suite, can lead to fraud by the management of a large corporation. And tDollar

Incentives in a financial system as complicated as that of United States can get distorted at multiple levels. The incentive of a lending manager can be to motivate them to distribute as many loans as they can within their territory, and they may not be getting penalized for making bad loans. But one potential result will be that they won’t be bothered about credit quality, and will become too aggressive in meeting the target numbers.

Likewise, the CFO of a large financial organization may know that the risk of going bankrupt is minimal, since the institution will be presumably be rescued by the federal government, but the reward of making a successful risky bet has no limits. Thus they may be incentivized to take excessive risks.

According to remarks in a recent speech by Janet Yellen, Chair of Federal Reserve Board of Governors, a combination of responses to distorted incentives throughout the financial system created an environment conducive to a crisis.

It’s not possible for a single small business lender (or borrower) to do anything about perverse financial incentives corroding the system, even if they become aware of them. Correcting them lies within the job of the financial regulators. However, it’s still within the realm of self-preservation that one should maintain some degree of rationality when encountering perverse incentives.

Meaning? If another financial instituion reaches out to hire you, and offers compensation with incentives that sound unrealistically too good to be true, do a sanity check in your head before responding. Are you really worth that much more than what you are currently compensated, or are there some perverse incentives at play?

Remember the old adage: if it sounds too good to be true, it usually is.

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Hot Air: Politicians Eschew SMEs for Big Business

By Charles H. Green

The Advocates for Independent Business, a consortium of fifteen trade associations that represent small business industries ranging from booksellers to florists, offered a sobering picture of the pandering nature of politicians, who hail small businesses as the bedrock of America, but throw billions of dollars to subsidize big business. Representing the advocates, Stacy Mitchell and Fred Clements penned a recent Op-Ed for the Wall Street Journal to make their case.

Said Mitchell and Clements, “A report by the research organization ‘Good Jobs First,’ Hot Airfound that two-thirds of the $68 billion in business grants and special tax credits awarded by the federal government over the past 15 years went to big corporations. State and local economic development incentives are similarly skewed. While the members our business associations—mostly independent retailers—must finance their own growth, one of their biggest competitors, Amazon, has received $330 million in tax breaks and other subsidies to fund its new warehouses.”

They continued, “Multinational companies also benefit from a host of tax loopholes. A local pharmacy or bike shop cannot stash profits in a Bermuda shell company or undertake a foreign “inversion.” The result is that small businesses pay an effective federal tax rate that is several points higher on average than that paid by big companies, according to a Small Business Administration study from 2009.”

To skew the lines of this argument further, it’s illuminating to recognize that many politicians demonstrate selective inconsistency in how they apply their own political ideology. In the face of smaller industries–such as independent businesses–who have little to offer other than simple votes, most politicians offer nothing in return.

While many wax on platitudes and rhetoric about the importance of apple pie and small business, after the election, many begin stammering about the “moral hazards” presented by government programs that incentivize small business resources, such as the U.S. Small Business Administration or U.S. Export-Import Bank.

But that’s in sharp contrast with how they view industries that can financially support their election campaigns. Ironically, it’s some of these same politicians who support government subsidies for agri-business giants like Monsanto and Archer Daniels Midland; who fight the imposition of sales tax collection on internet sales; who won’t address a broken corporate tax code that allows billions of U.S.-manufactured good sales to have profits rerouted to Ireland or another tax haven, to circumvent native tax coffers.

It’s the very definition of “crony capitalism.” And that is the real moral hazard we contend with.


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SBA Offers LINC to All Participating Lenders

By Charles H. Green

Last February, the SBA announced a pilot program to help small business owners locate a participating small business lender who offered SBA-guaranteed loan products called the ‘Leveraging Information and Networks to Access Capital’ program, or “LINC”. Initially the program was only accessible by the non-profit SBA lenders during its beta testing. During the recent “Small Business Week,” SBA Administrator Maria Contreras-Sweet announced that the pilot period was ending and that the program is now available to all participating SBA lenders.

“Effective today, all SBA lenders can participate in LINC, a platform that is bringing Business Loansentrepreneurs and SBA lenders together to increase access to capital. There’s a hunger among entrepreneurs to find financing to get their business off the ground or take the next big step in their expansion plan. The SBA stands there ready to help them, now with a few simple clicks,” said Contreras-Sweet.

The LINC matchmaking tool is now available to all 7(a) lenders nationwide, which constitutes a huge step toward giving small business entrepreneurs access to essential sources of capital in all 50 states and the U.S. territories.

“Since we launched this program in February, close to 14,000 matches have been made with LINC. If you have a bankable business idea backed by good credit and sound financial planning, the SBA is streamlining the process for you to get the capital you need,” said Contreras-Sweet.

The LINC portal is a proactive strategy in the marketplace to promote the SBA’s financing products to additional small business owners. In particular, it’s likely to benefit smaller, younger business owners who have not established banking or lending relationships to approach, and can save time and effort by narrowing their search for capital to SBA participating lenders.

For lenders, it offers one more lead generating source to connect with an ever fragmented, competitive small business environment. In particular, for those lenders  who have embraced smaller lending for SBA loans under $350,000, this tool is likely to increase their volume of inquiries.

Lenders may sign up for LINC electronically or email with questions.


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SBA Issues Latest Program Rule Revisions: SOP 50 10 5(H)

By Charles H. Green

In January, I reported on rumblings I had picked up on about yet one more revision to the Standard Operating Procedures (SOP) by the SBA, and voila, on April 30 Ann Marie Mehlum, the Associate Administrator for Capital Access, released an Information Notice announcing a revision, SOP 50 10 5(H). This version of the SOP will be effective and apply to all applications received by SBA on or after May 1, 2015.

If you’re feeling a little weary about changes to the SBA financing program rules, you SOPdeserve it–in fact you might be exhausted already. Participating lenders have been pummeled with nine SOP revisions or updates since President Obama took office in January, 2009. These changes have occurred under three different Administrators (out of five serving during these years) and have in toto made some significant changes to the lending programs.

Below is a brief outline of SBA’s summary of the primary areas which have been updated in this version. You can read their full statement in SBA’s Information Notice and download the new SOP 50 10 5(H) here.


 1) Revised Language Regarding Lender Oversight Monitoring and Reviews

In Chapters 1 and 3, SBA revised the language discussing how SBA oversees 7(a) lenders and Certified Development Companies (CDCs). First, SBA incorporated changes in the risk-based review protocols for lenders and CDCs. Second, SBA removed the delineation between “on-site” and “off-site” reviews and related fees

2) Incorporated Regulatory Changes Made to the 504 Program Regarding CDC Affiliation, Corporate Governance and Insurance Requirements

In Chapter 3, SBA has incorporated the regulatory changes regarding CDC Affiliation that became effective March 21, 2014. SBA has also incorporated the regulatory changes to corporate governance and insurance requirements for CDCs that became effective April 21, 2015.


1) Clarified the Policies Regarding Debt Refinancing for 7(a) Loans

In Chapter 2, SBA has clarified the policies regarding debt refinancing for 7(a) loans. Formerly, the SOP stated that SBA guaranteed loan proceeds may not be used to refinance debt used to finance a loan purpose that would have been ineligible at the time it was originally made. SBA is clarifying this provision by adding language to explain that a lender may refinance debt originally used to finance a loan purpose that would have been ineligible at the time it was made, if the condition that would have made the loan ineligible no longer exists.

3) Modified Documentation Requirements for Export Express Loans

Also in Chapter 2, SBA has removed language regarding documenting only the first full disbursement on an Export Express loan for a general line of credit as it may cause confusion. For such loans, lenders must demonstrate that at least 70% of the line of credit was used for export purposes.

4) Updated Real Estate Appraisal Requirements for 7(a) Loans

In Chapter 4, SBA has updated the real property appraisal requirements to conform to changes recently made in the Uniform Standards of Professional Appraisal Practice (USPAP).

5) Updated Business Appraisal Requirements for 7(a) Loans

Also in Chapter 4, SBA is updating the requirements for a business appraisal in the 7(a) loan program. First, SBA changed its terminology from “business valuation” to “business appraisal” to align with the terminology used in the lending industry. Second, SBA is adding a new accreditation to the list of qualified sources to perform a business appraisal: Accredited Business Certified Appraiser (ABCA). Third, SBA is updating the business appraisal requirements for change of ownership transactions involving a Special Purpose Property.

6) Required Use of E-Tran for all 7(a) Loan Applications

In Chapters 4 and 6, SBA is revising the SOP to state that all 7(a) applications for guaranty will be accepted only via E-Tran. E-Tran capacity has been increased to accept larger files.

7) Modified Process for Delegated Lenders to obtain loan increase and decreases

In Chapters 4 & 7, SBA is simplifying the process by which delegated lenders obtain SBA consent to increases and decreases in loan amounts prior to final disbursement. Delegated lenders will now access E-Tran directly to obtain loan increases and decreases for loans submitted under their delegated authority.


1) Clarified Language Regarding Borrowed Contributions for 504 Loans

In Chapter 1, SBA has clarified the specific circumstances under which the borrower must obtain SBA written approval to pay the loan for its equity contribution at a faster rate than the 504 loan.

2) Updated Real Estate Appraisal Requirements for 504 Loans

As discussed above with regard to 7(a) loans, SBA has updated the real property appraisal requirements in Chapter 3 to conform to changes recently made in USPAP.


In Appendix 2 (Definitions) and Appendix 3 (Reliance Letter), SBA updated the most recent version of the Transaction Screen assessment report to ASTM E1528-14.

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April SBA Loan Approval Volume Spirals Toward Record

By Charles H. Green

There is little doubt that FY 2015 will be the best ever on record for the SBA 7(a) loan program, both for large and small borrowers, as month-over-month loan approval stats continue to climb at rates never experienced. Just past midyear, the 7(a) program totals nearly $12 billion in approved loans, while the overall SBA lending program volumes and related 504/CDC program senior debt total over $17 billion, with five months remaining.

SBA published its monthly “Lending Statistics for Major Programs” recently as of April April 7a approvals30th that marked the end of the seventh month of FY 2015. This report provides rolling year-over-year loan approval statistics for the 7(a) and CDC/504 loan programs broken down by the respective categories of policy-targeted penetration.

The 7(a) program continued its strong showing in FY 2015 with total loan approvals in $11.9 billion, an almost 24 percent jump over the same period at 4/31/14 ($9.6 billion). In FY 2014,  all SBA financing programs started slowly after the federal government’s shutdown, but these results are about 25 percent higher than FY 2013 as well.

The number of approved 7(a) loans was 33,652 through month seven, 24 percent ahead of the number in YTD FY 2014, and 32 percent ahead the same period in FY 2013. The average loan size slipped about one percent in the month of April to $356,142, which  is about $1,000 lower than it was this month last year.

A graphical illustration of all SBA monthly loan approvals is found in Capital Views.

The spiked growth in approved loans for less than $150,000 continued in April, rising more than 29 percent over the same dollars approved in FY 2014 to $1.2 billion, with the average loan size holding steady at $60,725. This year is the second year SBA is waiving guaranty and lender fees on loans less than $150,000.

Meanwhile the total volume of approved CDC/504 loans ended April at $2.3 billion, falling nearly 3% behind the same period in FY 2014, reflective of the ongoing struggles this program continues to endure over the past two years. That volume is almost 20 percent behind the programs start in FY 2013 at $2.5 billion when CDC/504 loans were temporarily permitted to refinance other loans.

The total number of approved CDC/504 debentures was 3,258 through April of this fiscal year, which is less than 1% behind this point last year, which had approved 3,261 loans after the delayed start.

This year the CDC/504 program continues to be that the average debenture size is maintaining a higher average, at $719,882, which is almost three percentage above last year’s average and more than seven percent higher than the average in FY 2013.

Total YTD approved SBA program dollars are $14.3 billion by way of 36,910 loans. The average loan size overall is $388,249, which is lower than both of the last two years, given the growth in smaller loans. See total program approval rates here.

Read more results at SBA.

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