Arkansas SBA lending rises by 5% in 2018

by Talk Business & Politics staff ( 212 views 

The U.S. Small Business Administration (SBA) approved more than $214 million in loans to Arkansas small businesses for Fiscal Year (FY) 2018, a 5% increase over the previous year’s loan amounts. The federal government’s FY 2018 runs from October 1, 2017 through September 30, 2018.

In all, 262 small business loans closed for a total of $214,302,000. Sixty-three commercial lenders, credit unions, and certified development companies were involved in funding these small business loans.

“Small businesses are a critical component to economic growth in Arkansas,” said District Director Edward Haddock. “For many applicants obtaining funding through traditional commercial lending processes is difficult due to issues such as inadequate collateral, insufficient business history, being a start-up, and length of term for repayment.”

Haddock pointed out that when lenders leverage SBA programs they are able to help those small businesses with capital access that they might otherwise have difficulty approving.

“Through our 7(a) Loan that is the SBA’s largest financing program and the 504 Loan Program, lenders were able to provide over $214 million to eligible small businesses that they might otherwise not have been able to obtain,” he said.

SBA officials said 53% of the loans made were for startup and existing businesses in rural areas. Roughly 65% of those loans were for $350,000 or less.

In addition to SBA’s 7(a) Loan and 504 Loan programs, 34 small businesses in the state took advantage of the SBA’s Microloan Program for a total of $817,400. The average microloan was $24,000.

“The SBA Microloan Program is designed to provide small business loans to applicants of $50,000 or less,” said Lender Relations Specialist Herbert Lawrence. “These microloans are specifically designed to provide critical funding to small businesses needing smaller dollar amounts and who may have had issues in obtaining that funding through normal commercial lending channels.”

The two Arkansas microlenders, FORGE and Communities Unlimited, specialize in small loans to start-ups and existing businesses that commercial lenders were not able to make.

“Many of these microloans were made to underserved markets, specifically women, minorities, veterans, and rural businesses—often an under represented group searching for access to capital at reasonable rates,” said Lawrence.