ARRA boosts SBA loans
Published: October 2,2009
WASHINGTON — Changes under the American Recovery and Reinvestment Act (ARRA) to U.S. Small Business Administration (SBA) loan programs led to a rebound in SBA-backed loans for small businesses and greater access to much-needed capital.
Since the ARRA was signed Feb. 17, SBA has supported more than $11.3 billion in lending to small businesses through its two largest loan programs and seen its average weekly dollar volume increase by more than 60 percent in comparison to the weeks before the act. Additionally, the average number of loans approved per week has increased by more than 50 percent. The dollar volume for Sept. 2009 ($1.9 billion) was the highest single-month total since Aug. 2007.
As a result of the credit crunch, SBA lending saw a significant decline in the fall of 2008 and early 2009. For the seven weeks prior to ARRA being signed, SBA’s average weekly dollar volume was $165 million. The average weekly average since the act was signed, through Sept. 25, was $275 million.
Overall, SBA loan approvals for the fiscal year amounted to a combined 50,829 loans (preliminary number) worth $13.1 billion under the 7(a) and 504 loan programs. The comparable figures for fiscal year 2008, which ended just as the nation’s economy entered the financial crisis, were 78,317 and $17.96 billion.
The dollar volume totals for SBA loans in fiscal year 2009, which ended Sept. 30, do not include loans made under the agency’s America’s Recovery Capital (ARC) loan program. Launched June 15, the agency had approved 2,715 ARC loans worth more than $88 million as of Sept. 29. Thus far, nearly 740 lenders have made ARC loans, and the number of participating lenders is increasing by an average of about 50 per week.
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