SBA reports busy fiscal year
Lower interest rates and a new loan program fostered a significant increase in U.S. Small Business Administration lending activity in Wisconsin during the SBA’s 2003 fiscal year.
And the pattern is continuing into its new year, according to Eric Ness, the Wisconsin district director for the SBA.
In FY 2003, the SBA guaranteed 1,338 7(a) loans – it’s basic loan type — in Wisconsin, according to its year-end report. That compares to 1,072 such loans in its FY 2002.
The dollar amount also increased, from approximately $215 million to approximately $224 million.
The SBA’s fiscal year 2003 ended Sept. 30.
In the eight-county region of southeastern Wisconsin covered by Small Business Times, the picture was similar, but with dramatic increases in the number of 7(a)0 loans in Milwaukee and Waukesha counties. Milwaukee County saw an increase from 82 to 183 7(a) loans while Racine County went from 19 to 41 and Waukesha County went from 60 to 102.
"The Express Loan program is helping," Ness said of the overall increased activity. "It lets all participating lenders in the state make their own decisions for those type of loans, which can be for up to a quarter of a million dollars. Businesses are heavily using the program for lines of credit."
In FY 2003 in Wisconsin, there were 387 Express Loans, representing 30% of all its loans. The prior year, 17% of the total was Express Loans.
SBAExpress provides selected lenders with a 50% guarantee on their loans in exchange for the ability to use their own application and documentation forms.
"Also, with the low interest rates, it’s been a real prime time to get financing," Ness noted. If you can fix that rate, it’s great."
Ness also attributes some of the increased lending activity on the results of a slow economy: talented people who are laid off often go and start their own businesses.
"When people are laid off, they ask themselves whether they should stick it out and go back, or go off and start their own company," Ness says. "A lot of the heavily talented people are choosing to work for themselves."
Ness noted that, while the Milwaukee County 7(a) numbers are up so dramatically, there’s more to expect in FY 2004.
"We’re already running ahead of last year," he said. "And we’re trying to do some new things in Milwaukee County to get those numbers up even higher."
While the number of 7(a) loans was up dramatically in Milwaukee County, the number of 504 program loans, which provide growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings, fell from 10 to eight, which could be attributed to the condition of the manufacturing economy.
In the eight-county area, 7(a) loan numbers in 2002 and 2003, respectively, were: Kenosha County, 18 to 23; Milwaukee County, 82 to 183; Ozaukee County, 20 to 15; Racine County, 19 to 41; Sheboygan County, 67 each year; Walworth County, 18 to 33; Washington County, 17 to 22; Waukesha County, 60 to 102.
Dec. 12, 2003 Small Business Times, Milwaukee
