Small Business Lending Reflects Strong Economic Trends

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Small Business Lending Reflects Strong Economic Trends

SBA Houston District approves $1.049 Billion in capital assistance to 1512 small businesses in Fiscal 2019

HOUSTON – The Houston District Office of the U.S. Small Business Administration announced the Fiscal Year 2019 capital assistance numbers showing that it guaranteed over $1.049 billion to small businesses that otherwise may not have had access to capital. This helped support more than 9,946 jobs throughout the district.

“This funding is great news for Houston District borrowers and the local economy,” said South Central Regional Administrator Justin Crossie. “A top priority of this Administration is to support America’s entrepreneurs with access to capital in large cities, rural areas and Opportunity Zones where economic development depends on the strength of thriving small businesses that are creating the majority of our local jobs.”

“The fundamentals of Houston’s economy are sound. An example is the big 18% increase in the number of Surety Bond guarantees. These SBA guarantees – $126M worth in FY19 – increase the bonding capacity of small businesses, enabling them to get bigger and potentially more profitable contacts” said SBA Houston District Office Director Tim Jeffcoat.

The driving force behind making SBA Guaranteed loans, which are just one of the areas of capital assistance from the SBA, is expert staff and vast experience. “We recognize how critical it is that businesses and their owners have the resources necessary to start, run and achieve their financial and business goals,” said Doug Anders, SBA Business Development Officer, Wells Fargo. Wells Fargo was the number one lender in unit volume in the Houston Market, with 133 SBA-Guaranteed loans in FY19. “Our leadership in SBA lending in Houston is a sign of our commitment to filling this need and it is an achievement in which we take great pride.”

According to Courtney McClendon, Senior Vice President and SBA Manager at Plains State Bank, through SBA lending, they can consider the whole picture – the background of the business, the people behind the business, and what is needed to reach their goals. “Plains State Bank is focused on building a relationship with our customers and understands that there is more to the story than just the numbers on a financial statement. The Small Business Administration offers various programs that help banks provide access to capital for businesses of all size, industry, and objective. As an SBA preferred lender, we use our expertise to choose the right program that best fits the needs of our customer.” Plains State was the number one lender in dollar volume in the Houston Market, with $48.5M of SBA-Guaranteed loans in FY19.

There are four main categories of SBA financial assistance.  During FY19, which ended Sept. 30, SBA guarantees of the flagship 7(a) program totaled $923.57 million (1,191 loans).  SBA guarantees of Surety Bonds increased to $566 million (222 bonds).  The 504 loan program, intended for fixed assets and land improvement projects, recorded another year of increased performance with $76.9 million (66 loans).  Finally, the SBA microloan program, with loans that range from $500 to $50,000, recorded $425K (33 loans).

“With a strong economy and historically solid small business optimism, we know that 7(a) lenders are making loans conventionally without the SBA guarantee. We also saw a 4.3% growth in the 504 loan program due to the longer term and low fixed interest rate that the product provides to small businesses,” said Associate Administrator for SBA’s Office of Capital Access William Manger. “We are also proud that our Microloan program had another record year with a nearly 7.5% increase in small business lending.”

The SBA 504 loan is intended for long-term, fixed-rate financing of fixed assets with reasonable terms. “Our initial lender easily qualified my business for the 504,” said Business Owner Luke Billiot, MBA at Cornerstone Maintenance & Landscaping. “We have a great relationship with our lender who made the connection to our CDC. The 504 interest rate for our new building was the lowest they had ever seen.”

Top 10 Industries by Dollar Amount

1. Accommodation and Food Services – $188 million

2. Health Care & Social Assistance – $149 million

3. Other Services (except Public Administration) – $117 million

4. Retail Trade – $55.6 million

5. Wholesale Trade – $54 million

5. Professional, Scientific & Technical Services – $49 million

6. Manufacturing – $44 million

7. Construction – $43 million

8. Arts, Entertainment & Recreation – $36 million

9. Real Estate & Rental & Leasing – $28 million

10. Transportation and Warehousing – $21 million

Top 10 Industries by Number of Loans

1. Other Services (except Public Administration) – 173

2. Accommodation and Food Services – 172

3. Health Care & Social Assistance – 148

4. Construction – 112

5. Professional, Scientific & Technical Services – 100

6. Retail Trade – 85

7. Arts, Entertainment & Recreation – 63

8. Wholesale Trade – 59

9. Transportation & Warehousing – 52

10. Manufacturing – 49

Top 10 7(a)Lenders by Dollar Amount

1. Plains State Bank – $48 million

2. Wells Fargo Bank, NA – $42 million

3. Live Oak Banking Company – $37 million

4. Allegiance Bank – $35 million

5. Wallis Bank – $34 million

6. JPMorgan Chase Bank, NA – $27 million

7. BBVA USA – $26 million

8. Zions Bank – $24 million

9. Veritex Community Bank – $22 million

10. Third Coast Bank SSB – $20 million

Top 10 7(a)Lenders by Number of Loans

1. Wells Fargo, NA – 133                

2. JPMORGAN Chase Bank, NA – 93           

3. Zions Bank – 48

4. Stearns Bank NA – 44

5. Spirit of Texas, SSB – 43                 

6. First Home Bank – 40                      

7. Comerica Bank – 37

8. Wallis Bank – 36

9. Live Oak Banking Company – 30

10. Allegiance Bank – 30

Top 504 Lenders

1. Capital CDC – 25 approvals for $35.2 million

2. North Texas CDC – 17 approvals for $21.3 million

3. LiftFund, Inc. – 6 approvals for $6.6 million

4. Community CDC – 5 approvals for $5.3 million

5. Greater East Texas CDC – 5 approvals for $5 million

6. Southeast Texas EDF – 4 approvals for $1.6 million

7. Texas CDC, Inc. – 1 approval for $799 thousand

8. Enchantment Land – 2 approval for $481 thousand

9. PeopleFund – 1 approval for $208 thousand

In addition to the strong lending numbers, the SBA continues to innovate and improve processes by leveraging enhanced technologies. Lender Match is an SBA technology platform that gives entrepreneurs the ability to complete a quick online form, without registration or cost to the user to connect with an SBA-approved lender within 48 hours. To date, Lender Match has generated 4.4 million leads on behalf of small businesses to our lenders, and lenders have contacted more than 230,000 unique borrowers with financing options.

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