SBA Lending Falls Dramatically from Last Year

Washington, DC, Oct. 5, 2009--The Small Business Administration ended its 2009 fiscal year on Wednesday and the agency approved less than 45,000 loans, down 36% compared to last year and 56% from 2007.

The loan volume reflects all the small business loans approved by lenders that are guaranteed by the government under the SBA's flagship 7(a) lending program.
In addition to the drop in number of loans that were approved to small businesses, the total dollar amount also fell drastically to $9.3 billion total, falling short of last year's total by about $3.4 billion.

Lending, however, appeared to rebound in the later part of the year, which the agency attributes to stimulus-related efforts. "We had a big finish to the fiscal year," says SBA spokesman Michael Stamler. "Dollar volume for the [7(a) loans] in September was the highest recorded since August 2007."

The secondary market, where banks had typically sold their SBA loans to investors in order to initiate new loans, came to a standstill.