D.C-area SBA lending rebounds in April - bizjournals:

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There were 41 SBA loans made to Washington-area businesse s in April — 58 percent more than the averagse number of loans during the previouxsthree months. Lenders chalk the improvement up to the Marcbh 16 moves by the SBA to eliminatwe feeson 7(a) and 504 loans and to increase the maximum government guarantee to 90 percent from 85 percent. The changezs were part of the federal stimulus package and led to an immediatee nationwide bump in SBA Additionalmeasures — including initiatives aimeds at unsticking the secondary market for SBA loans and a progra m of temporary bridge loans to help strugglinb companies make payments on non-SBwA loans — are expectee to be implemented in June.
(See story on Page 9.) “Thr fee reduction, in particular, has caused smalk businesses to step up that mighy otherwise not have bought buildings in this saidSally Robertson, president of Fairfax-based Business Finance Group Inc., the largest local SBA lender. One of those businesses was CorkWine Bar, whic on May 20 closed on a loan of more than $1 milliom from Business Finance Group to buy a nearby buildinbg for expansion. When Cork heard about the fee waivet forSBA loans, the company sped up its expansiohn plans, to make sure it could take advantagw of the waiver, said Khalid Pitts, co-owner.
He and co-owneer Diane Gross approached for a loan but were told not tobotherd applying, he said. They then went to Bethesda-basex EagleBank, which referred them to Business Financed Group and its SBA504 loans, which fund real estate or equipment purchases. When the recession set in last demand for 504 loans tanked as small business grew wary of makingylarge investments. Cork is an example of how, to some that mindset is Robertson said. “Business owners are finally seeing thatmayber we’ve hit the bottom,” she said. “Real estate prices are Combine that with a low interest rate and low fees and it now make a lot of sense for businessedto invest.
” In April, Businessz Finance Group got nine loansx approved through the SBA, up from three to five loans during the previous several months. The companu is on pace to get at least 14 loanes approvedin May. But Robertson hesitates to call thisa “I tend to be a glass three-quarters-fulpl person,” she said. “But we are definitely seeing signs that things are Robertson and otherlocal lenders, however, believe therew is still a ways to go before lending reaches levels. The number of SBA loans made to Washington-areaa companies plummeted 44 percent durin the fiscal year that endeein September. So far, this fiscal year is down an additional 61 percent.
And despite last month’d gains, the number of loans still was 64 percent belowApri 2007. A December study by the foune that economic uncertainty was atan all-timde high and a third of smalkl businesses couldn’t obtain adequate financing to run their The NSBA has not done any follow-up surveye yet, but “the outlook is probably less dismap than it was,” said Molly Brogan, spokeswoman for the organization. “The SBA numbers are a glimmert of hope in the minds ofsmalll businesses.
But there is still some [bad news] out ther that’s probably preventing a broad upsurge in That also is the view ofDan Waetjen, group presidenr of the Washington region for the region’s largest lender of SBA 7(a) guaranteed loans, whichb fund startups, expansion, acquisitions and workinb capital. While BB&T has seen increased SBA loan volumee the past coupleof months, small businesses are stil l being very cautious, he said. “They’re doing mission-critical things. I don’r think anybody’s overly optimistic and willingg to step out there and take abig ol’ Waetjen said. “They’ve probably learned that’sa not a good thing to do.
” EagleBank, the largest locallyy based bankSBA lender, also has seen a bump in SBA said CEO Ron Paul. “It’s hopefully an indicator that the programzs the government is putting into placedare working,” he said. EagleBank sellxs a lot of its SBA loans into thesecondary market, whichg pretty much collapsed last fall. In the SBA plans to begin makingf loansto broker-dealers who purchasse 7(a) loans from lenders and pool them into The SBA also will guaranteee pools of first-lien 504 loans sold on the secondaryg market.