Demand for SBA Financing: Small Businesses in Nebraska See Small Jump in SBA Loan Volume for 1st Quarter of FY ‘14

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Omaha, NE – 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 the first quarter of Fiscal 2014, ending December 31.

Over the past three months, the SBA, working with our commercial lender partners, approved 79 loans for $32.8 million in volume for small businesses across the state; the latter represents a small rise in total dollar amount financed as compared to the same time last year.

One reason for the bump in volume: the SBA eliminated up-front fees for borrowers for loans $150,000 and less, saving borrowers up to $2,500 in fees on a loan of that size.  Eliminating these up-front fees likely increased demand from small business owners for SBA-guaranteed financing for their start-up and expansion projects, according to SBA Nebraska District Director Leon Milobar.  Since the policy change Oct. 1, and through the first quarter, the SBA has approved 41 loans for $150,000 or less.

In a strong sign of confidence in Nebraska’s entrepreneurial economy, 36 percent of all SBA loan approvals in the first quarter went to fund new businesses; 46 percent of loans went to firms owned 50 percent or more by women.

The SBA, working with banks and credit unions across the state, approved nearly twice the volume of loans to businesses in the health care and social assistance industry than any other industry category in the first three months of FY 14, with some $9 million in volume; accommodation and food services industry and firms in agriculture, forestry, fishing and hunting rounded out the top three with more than $4 million in volume each.

Moreover, as a direct result of SBA-guaranteed small business financing throughout the state over the past three months, 126 new jobs are being created in Nebraska, and 330 jobs are being kept on payrolls. 

According to the SBA’s Office of Advocacy, slightly more than half of all jobs in Nebraska are from companies with fewer than 100 employees.

“So far this fiscal 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,” Milobar said.  “The SBA’s policy changes to eliminate fees for our smaller loans lower the barriers considerably for borrowers.  Bottom line, when small businesses can get the financing they need, they create and keep jobs in our state.”

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.

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