For a second year in a row, Wells Fargo has approved more than $1 billion in SBA 7(a) loans. The bank’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 Fargo’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.
“We are still seeing optimism out there, despite what you read in the headlines,â€ Rader said. “We are seeing individual entrepreneurs feeling confident about their businesses, and good opportunities…They’re very savvy, buying partners, expanding their businesses. They maximize opportunities when they see them.â€
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.
“Our customers have contracts and see their revenues going up, they’re optimistic,” said Rader. “They’ve adjusted their spending, reduced debt and they’re maximizing opportunities.â€
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.
“I think the optimism is well-found,â€ Ledesma said.
Bill Hoyt of Tampa, Fla., agrees with this statement.
“The entrepreneurial spirit has always been in my blood, but I needed to find the right opportunity to use my management experience…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€