SBA Loan Volume Sets Record in Michigan
DETROIT — The Michigan District Office of the United States Small Business Administration last week announced that 2,075 loans for a total of $944 million were made in fiscal 2012. Although the total number of loans decreased from fiscal 2011, the dollar value increased by $10 million, setting a new record in Michigan.
The Michigan District Office guaranteed 1,742 loans under its flagship 7(a) loan guarantee program in fiscal 2012, for a total of $547 million. This was 16 percent lower than the prior year, primarily due to the end of American Recovery Act funding.
However, SBA 7(a) dollar volume was the second highest ever in Michigan. The 7(a) loan guaranty program provides a 50 to 90 percent guaranty to a financial institution, giving more small businesses access to much needed capital to fund working capital, machinery and equipment, or purchase real estate.
“Lenders throughout the state have found that SBA loan programs are an important asset in helping small business clients,” said Gerald Moore, SBA Michigan District Director.
Driving the record setting dollar value in fiscal 2012 was the SBA 504 loan program with 333 loans totaling more than $176 million, another record setting amount. These loans leveraged another $221 million in financing for a total of more than $397 million in financing for Michigan businesses through the 504 program.
“This program helped small businesses position themselves for expansion and job creation,” said Moore.
The dollar value was 62 percent higher compared to the prior year. The increase in the 504 loan volume was driven by a temporary program that allowed for the refinancing of existing debt. The authority for the refinancing program expired at the end of September, 2012.
Loans were made in 74 out of 83 counties in Michigan by more than 135 lenders demonstrating widespread participation in SBA loan programs throughout the state.