October 2018
Commercial Lending
SBA Small Business Lending Momentum Continues in FY18

The Small Business Administration (SBA) recently announced FY18 lending numbers showing that it guaranteed over $30 billion to small businesses that otherwise would not have had access to capital.

Small Business Lending Momentum Continues  for SBA PRogramsThe SBA’s 504 Loan Program had another year of high performance for lending, with 5,874 loans made for a total dollar amount of over $4.75 billion.  In FY18, the SBA launched the 25-year debenture, which offers an extra 60 months of financing at a fixed interest rate to help free up cash for small businesses.  Since its introduction in April, over 1,000 debentures had been sold by the end of September.

The 504 Loan Program provides expanding and modernizing small businesses with up to 90% financing at below-market fixed interest rates and long amortization terms specifically for the purchase of major fixed assets, such as land and owner-occupied commercial buildings, including green projects, and/or heavy duty machinery and equipment.  The program also allows for business debt refinancing both with and without expansion requirements.  504 loans are available through Certified Development Companies (CDCs) like Florida First Capital.

The 7(a) Loan Program had 60,353 7(a) loans made in FY 18 with a total dollar amount of $25.37 billion.  The 7(a) Loan Program provides small businesses with broad financial assistance covering the vast majority of small business needs, including working capital, fixed and intangible asset financing, as well as refinance and export support through term and revolving loans.  7(a) loans are available through commercial lending institutions.

In FY18 there was significant growth in the SBA’s smaller loans, including a record volume of dollars lent in the Microloan and Community Advantage Programs.  Specifically, over 5,000 loans were approved for over $72 million in the Microloan program and over 1,000 loans for over $150 million in SBA’s Community Advantage program.

The SBA continued to innovate and improve processes by leveraging enhanced technologies.  One such technological innovation was the development of the SBA’s Franchise Directory, which was launched this year and has resulted in an over 50% increase in eligible franchise brands.  There are currently 3,192 brands on the Franchise Directory.  When the directory was first published in October 2017, there were only 2,034 brands listed.  In FY18, SBA has seen a year over year increase of over 21% in 504 and 7(a) dollars going to franchises.

“SBA’s 7(a) and 504 loan programs have never been more dynamic, easy to use and accessible — helping small businesses succeed and thrive.  Our loan programs in FY18 continue to show strong performance, and we believe the President’s tax cuts and deregulatory actions will help more small businesses grow and prosper in the coming year,” SBA Administrator Linda McMahon said.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at info@ffcfc.com.  Phone: 850.681.3601 or toll-free at 800.504.LOAN.