The Georgia district office of the U.S. Small Business Administration announced Monday that it has approved more than $1 billion in guaranty lending for the 2011 fiscal year which ends this month, a record annual total.
The loans, to small businesses across the state, are guaranteed in part by the SBA, decreasing the risk taken on by the participating banks and other commercial lenders making the loans. The SBA guarantees 75 or 85 percent of a loan, depending on the amount, in its primary loan program.
The amount of loans jumped to $1.1 billion from $647 million last year, and exceeded the previous high in Georgia of $671 million in 2008, prior to the start of the recession. Loan totals were up even though incentives offered through the Small Business Jobs Act and the American Recovery and Reinvestment Act, including higher loan percentage guarantees and lower fees, have expired.
SBA district director Terri Denison called the increase "an encouraging sign, compared to where we were in the fall of 2008 when SBA lending and lending activity in general had come to a complete standstill."
She said lenders who already were using SBA programs are now looking to the SBA for help making loans that they would have done conventionally prior to the recession. The guarantees are intended to prompt otherwise reluctant lenders to make loans, and they might be having an impact.
The lack of available loans has been one of the biggest complaints of small business owners.
The top three industries that took advantage of guaranty lending in Georgia were hospitality, retail and health care.
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