By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Oct. 20, 2009
The number of business loans in South Carolina backed by the U.S. Small Business Administration has picked up in the past three months, following a notable slowdown during the preceding 14 months.
The SBA guaranteed 47 loans statewide in July, 46 in August and 45 in September. In earlier months this year, the totals were in the 24-to-29 range, generally, and hit a low of 15 in January.
Loan activity still isn’t back to the levels from 2007 and early 2008.
During 2007, the number of loans made monthly averaged 62. SBA-backed loans in 2008 peaked in April at 70, after which activity barely reached even half that level for the remainder of the year.
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Elliott Cooper, S.C. district director for the SBA, said the recent increase in activity is a result of February’s federal stimulus act provisions gaining traction.
Provisions in the stimulus act included a temporary elimination of loan fees and an increased guaranty level, from about 80% to 90% on 7(a) loans, one of the most popular SBA loan products.
“You announce something, and it just takes a while for it to build some momentum,” Cooper said.
Also, secondary market activity has restarted, Cooper said, thanks in part to other provisions of the stimulus act.
Secondary investors allow banks to make SBA loans and sell the guaranteed portion, earning a premium and freeing up their money to make additional loans. Earlier this year, bank officials said the secondary market for SBA loans had slowed substantially, which reduced their appetite for making the loans.
The elimination of loan fees and the increased guaranty are set to expire at the end of this calendar year. Cooper said it’s unclear what impact the expiration will have.
“It’s hard to judge that, because, if the economy is picking up, you might not see the slowdown,” Cooper said. “If not, it could have some impact. I don’t know that it will, but it could.”
| Loans to S.C. Firms Guaranteed by the U.S. Small Business Administration | ||||||
| 2007 | 2008 | 2009 | ||||
| January February March April May June July August September October November December | Loans 62 46 61 58 65 65 58 63 77 68 62 60 | Amount $ 17,555,900 $ 10,518,600 $ 14,588,000 $ 11,723,500 $ 12,007,310 $ 15,192,300 $ 15,975,000 $ 11,883,600 $ 21,159,800 $ 13,325,400 $ 14,938,200 $ 18,008,200 | Loans 54 58 69 70 32 31 29 32 32 27 29 28 | Amount $16,427,100 $13,530,200 $18,417,000 $19,586,700 $ 7,661,300 $11,607,300 $10,495,700 $11,997,900 $16,768,000 $11,128,086 $11,665,600 $ 6,579,500 | Loans 15 27 25 24 27 29 47 46 45 | Amount $ 3,572,300 $ 8,875,000 $ 5,409,000 $ 7,814,100 $ 6,395,500 $ 7,795,100 $15,922,000 $ 7,205,600 $11,570,500 |
Source: SBA
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