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Second-best year ever in SBA loan dollar amount in the state
The number of small business loans financed through the SBA proved crucial to start-up and existing small business owners across Nebraska by providing needed access to capital in FY 2012, ending September 30.
This year over 79 lenders participated in our loan guarantee programs which resulted in 441 loans for $156.5 million in loan guarantees and closely matched the previous pre-recessionary participation rate. The top five industries receiving funding in Nebraska were: Hotels and Food Service; Manufacturing; Retail Trade; Health Care Related Industries; and Construction.
In a strong sign of confidence in Nebraska’s entrepreneurial economy, 45 percent of SBA loan approvals in Fiscal 2012 went to fund new businesses. Normally, between 33 to 40 percent of SBA-backed loans are made to start-up companies.
Moreover, FY 2012 will go down as the SBA’s second biggest loan volume year ever in dollar terms in Nebraska, second only to last fiscal year, which got a huge boost in the first quarter from the loan incentives provided by the Small Business Jobs Act of 2010. The average dollar amount per loan in Fiscal 2012 was nearly $355,000, an increase of 12 percent from 2011.
As a direct result of SBA-guaranteed small business financing throughout the state this fiscal year, nearly 2,000 new jobs are being created in Nebraska, and 6,200 jobs are being kept on payrolls. According to the SBA’s Office of Advocacy, half of all jobs in Nebraska are from companies with fewer than 100 employees.
Overall, the pace of SBA loan-making is a healthy sign for the economy and the credit markets and is one of the foundations for ensuring the availability of financing to small businesses trying to establish themselves, grow and create new jobs for Americans.
“This year the biggest issue for small businesses in Nebraska continues to be access to capital. It’s encouraging to see they are continuing to take advantage of our loan programs in steady numbers,” said Leon Milobar, District Director of SBA’s Nebraska District Office. “Even with the continuing challenges throughout the economy facing them, small businesses here in Nebraska continue to find opportunities to expand their operations thereby creating and keeping jobs in our state.”
Lender Relations Specialists from the Omaha-based office fanned out throughout the state this year, making almost 300 face-to-face visits to commercial lenders to raise awareness of SBA-backed loan programs. Most of SBA financing went to small businesses located in urban areas (75 percent), with 110 loans going to small businesses in rural regions of the state.
Wells Fargo made 33 loans, more than any other lender in the state with nearly $14 million in volume. First State Bank Nebraska, the SBA’s Rural/Small Lender of the Year in FY 2012, made 28 SBA-financed loans for almost $4 million in volume. The largest 7(a) loan during the fiscal years was $5 million to a cattle feeding operation and the largest 504 loan totaling $5.4 million went to an industrial manufacturing concern.
The SBA’s 504 loan program, designed for large equipment and real estate financing, enjoyed another successful year with 73 loans for $50.9 million going to Nebraska businesses. The majority of those projects were from the two Certified Development Companies located in Nebraska - Nebraska Economic Development Corporation (57 loans) and Community Development Resources (12 loans). This represents a 64 percent jump in loan volume for the program. As a result of 504 financing, an estimated 625 new jobs were created in Nebraska. Some of this increase can be attributed to a provision of the Small Business Jobs Act of 2010 which allowed small businesses to refinance business debt into a long-term SBA-funded loan. This option expired September 27, 2012.
SBA-backed loans represent a fraction of small business lending nationwide. However, these loans are closely monitored as an indicator of bank’s willingness to lend to Main Street companies.