SBA Loans Pump Cash into Economy


SBA Loans Pump Cash into Economy

SBA loansThe Small Business Administration’s Lower Rio Grande Valley District saw an increase in the amount of money loaned to businesses in fiscal year 2017, even though there was a slight decrease in the number of loans approved.

The LRGV district guaranteed 191 loans in the 7(a) and 504 loan programs. These programs combined provided more than $71 million to small businesses that created 633 jobs and retained 984. The loans represented a 7.5 percent increase in dollars loaned over the previous year.

SBA’s flagship loan program, referred to as 7(a), provides small businesses with guaranteed loans covering the vast majority of small business needs, including working capital, fixed and intangible asset financing, as well as refinance and export support through term and revolving loans.

Specifically, the 7(a) program supported more than $62 million spread across 183 loans. Of those 183 loans, 149 were loans of $350,000 or less, meaning 81 percent of the approvals are small loans made to emerging businesses.

On the other hand, 504 loans provide small businesses with long-term fixed rate financing to acquire fixed assets, and are available through Certified Development Companies, SBA’s community-based partners.  In fiscal year 2017, the 504 program remained at zero subsidy, and grew to almost $9 million in loan value in the LRGV District, a 15 percent increase over the previous year.   

What’s more, SBA lending had a significant positive effect on businesses that have historically faced greater challenges in obtaining conventional loans.  Namely, loan approvals in the LRGV District to veteran-owned businesses increased 86 percent, from seven loans in fiscal year 2016 to 13 loans in 2017.

Further review demonstrates the top three industries receiving guaranteed loans were accommodation and food services with 15 percent, transportation and warehousing with 15 percent and retail trade at 14 percent of the total volume share, respectively.

Lastly, BBVA Compass recaptured the district’s top SBA lending title in 2017, making 74 loans valued at $4 million, followed by Wells Fargo. PeopleFund was third while Lone Star National Bank and JP Morgan Chase Bank N.A. tied for the fourth highest volume lenders in the district.

I want to give a special thank you to all of our lending partners. They worked really hard helping entrepreneurs gain access to capital to start or expand. Additionally, the SBA LRGV District staff looks forward to another successful year not only for our capital access programs but also for our entrepreneurial education and government contracting activities.

For more information about SBA’s loan programs, financial assistance and other services, visit the LRGV District Office in Harlingen at 2422 E. Tyler Ave., Suite E, or call 956.427.8533 or visit online. The district covers 14 of the 254 counties in Texas, and is comprised of a diverse landscape to include international ports of entry, beaches, deep sea ports, ranch land and metropolitan areas.