For a second year in a row, Wells Fargo has approved more than $1 billion in SBA 7(a) loans. The bankâ€™s record $1.24 billion in deals were done via 3,176 loans throughout the 2012 fiscal year from October 2011 through Sept. 30, 2012.
The head of Wells Fargoâ€™s SBA lending Division, Dave Rader, said that there is a sense of optimism among customers; and even though the economy is slow moving; they are willing to take on risks.
â€śWe are still seeing optimism out there, despite what you read in the headlines,â€ť Rader said. â€śWe are seeing individual entrepreneurs feeling confident about their businesses, and good opportunitiesâ€¦Theyâ€™re very savvy, buying partners, expanding their businesses. They maximize opportunities when they see them.â€ť
Rader said the average loan size in 2011 was around $391,000, and a typical 7(a) loan has a 5% interest rate over 25 years. Also, due to the current low interest rate environment, fixed-rate loans have become popular among small-business borrowers.
â€śOur customers have contracts and see their revenues going up, theyâ€™re optimistic,” said Rader. “Theyâ€™ve adjusted their spending, reduced debt and theyâ€™re maximizing opportunities.â€ť
Chris Ledesma, vice president of strategy for Wells Fargo SBA Lending, said business owners are feeling more comfortable taking out loans, due to continuing low rates.
â€śI think the optimism is well-found,â€ť Ledesma said.
Bill Hoyt of Tampa, Fla., agrees with this statement.
â€śThe entrepreneurial spirit has always been in my blood, but I needed to find the right opportunity to use my management experienceâ€¦and the right financing to make it possible,” said Hoyt. “With Wells Fargo, I had a team of people who worked with me to secure and SBA loan, giving me confidence that I had the capital I needed to be successful from day one.â€ť