Demand for SBA Loans Sets Record Pace In First Quarter of FY 2005

American small businesses set a record pace of borrowing to start and expand their companies over the first three months of the current fiscal year, securing backing from the U.S. Small Business Administration on 23 percent more loans than in the same period a year ago.

“The heavy demand for SBA backing for guaranteed loans is gratifying,” said SBA Administrator Hector V. Barreto. “This tells me that American entrepreneurs are moving with confidence to start new businesses, build their companies, create jobs and grow the American economy. These programs set an all-time loan volume record last year. We are well ahead of last year’s pace at this point, and under President Bush’s leadership, we will continue to make efficient, effective and dependable access to credit a cornerstone of our small business policy.”

The gains are reflected in the SBA’s Certified Development Company, or 504, loan program. Through the first three months of the fiscal year, the 504 program had issued 1,780 loans worth $882.9 million, about 13 percent ahead of the same period a year ago, when the program had 1,576 loans for $743.25 million.

Legislation signed into law by President George W. Bush in early December makes more than $21 billion available to small businesses through the SBA’s two main loan programs. The budget gives SBA the capacity to support $5 billion in loans under the 504 program.

An additional enhancement to the 504 program was Congress’ action to raise the maximum loan size to $4 million for small manufacturers.