More capital is getting into the hands of entrepreneurs. At least that is according to SBA Administrator Maria Contreras-Sweet, based on the latest figures showing that the U.S. Small Business Administration 7(a) Loan Program reached another lending record in 2014, By the end of the fiscal year (Sept. 30), SBA had approved 52,044 7(a) loans for $19.19 billion, an increase of 12% in number loans and 7.4% in dollar amount over fiscal year 2013.
Reportedly, during fiscal 2014, the number of SBA loans to African Americans grew by roughly 36% over the previous year. For Hispanics and women, there was an increase of 14% for each group.
The 7(a) program is designed to provide small businesses with the most comprehensive type of financial assistance to cover the vast majority of business expenses, such as short and long-term working capital, exports, and refinancing existing debt under certain conditions.
“As our economy continues to grow and recover, small businesses are the essential fuel to that continued growth,â€ said Contreras-Sweet in a statement. “Thanks to the hard work and outreach by our lending partners, SBA staff, and our resource partners, as well as the small business owners themselves, more capital is getting into the hands of entrepreneurs.â€
SBA had been authorized $17.5 billion in the FY 2014 lending program. It became clear that lending would exceed that amount; therefore the agency secured an increase for the 7(a) program in the Continuing Resolution that was approved in mid-September. In FY 2014, SBA added 308 new lenders that, collectively, made 684 loans for nearly $317 million.
Other SBA loans that did well in fiscal 2014 were those $150,000 and under. Spurred by the fee relief implemented at the beginning of the fiscal year (fees were set to zero), these loans saw an increase of 23 percent in number of loans (30,675) and 29 percent in approved dollars ($1.86 billion) over fiscal year 2013 (24,923 and $1.44 billion respectively).
Fee relief was also instrumental in helping veteran small business owners through the Veteran Advantage initiative (zero fees on loans $150,000 to $350,000 to veterans.) Fee relief for veterans began January 1, 2014, and by the end of the fiscal year amounted to $610,000. Fee relief for both loans $150,000 and under, and for Veterans Advantage, was extended through fiscal year 2015.
As exports continue to play a pivotal role in strengthening the nation’s economy, SBA loans to exporters grew by 3.7% in number of loans and 12% in dollar amount over last year.