Federal SBA backs record $1.4 billion loans to Georgia businesses

Small businesses in Georgia took out a record $1.4 billion in government-backed loans under the federal Small Business Administration’s program in 2016, according to the agency.

The loan volume in Georgia increased almost 15 percent in dollar terms over the previous year, according to the agency. The SBA guaranteed 2023 loans during its fiscal year that ended Sept. 30, 12 percent more than the previous year.

“We are very excited to see this record-level of lending activity. It means small businesses are growing, jobs are being created and the economy is continuing to rebound,” said Terri Denison, director of SBA’s Georgia district office in Atlanta.

Lending volume to women- and minority-owned businesses in Georgia grew at a similar pace. The SBA guaranteed 277 loans totaling $106 million to minority-owned businesses, up 11 percent and 19 percent, respectively.

Women-owned businesses received 397 loans totaling $202 million during the fiscal year, up 9 percent and 10 percent, respectively.

Under the SBA’s most widely used program, authorized banks or other lenders can loan up to $5 million to an eligible business, and the agency guarantees up to 75 percent of the amount if the business defaults on the loan. The guarantee goes up to 85 percent for loans smaller than $150,000.

The SBA’s program in Georgia has grown substantially since its pre-Great Recession peak in 2007, when such lending in the state totaled $789 million.

SBA lending also accounted for a significant share of lending in the state in the recent 12-month period ending in September, although volumes apparently grew at a slower pace than overall lending in Georgia.

According to the FDIC, total loans by Georgia's banks and other financial institutions grew about $12.1 billion over the 12 months ending Sept. 30, to $218 billion.

That was almost double the roughly $6 billion increase in banks’ loans in the year-earlier period, according to FDIC data.