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SBA Lending Returns to Pre-Boom Levels

Posted At : February 7, 2012 4:46 PM
| Posted By : information@mcb-cpa.com
Related Categories: Closely Held Business, Government Contracting, Private Equity-SBICs and Venture Capital

A steady flow of new loans backed by the Small Business Administration in the Washington area is helping some institutions return to the pace of lending that was common in the pre-boom years.

Through the three months ended Dec. 31, 2011, the start of the agency's 2012 fiscal year, 126 loans totaling $43.4 million were made to local mom-and-pop shops, comparable to loans issued during the early 2000s, according to the SBA.

Compared with the high loan volume between October 2010 and December 2010, the most recent figures seem low. During that period, 237 loans worth $93.6 million were doled out to area small businesses. In those days, however, borrowers flocked to lenders to take advantage of fee waivers before they expired under the terms of the Small Business Jobs Act of 2010.

"We had a flurry of activity as those waivers were wearing off," said Sally Robertson, President of Business Finance Group, a Fairfax-based certified development company, and MCB client, that manages SBA 504 loans, which fund fixed assets such as equipment and real estate.

Business Finance Group closed 13 SBA-backed loans totaling $5.6 million in the three months ending December 2011, a 64.3 percent drop in money from the same period a year earlier. As steep as the decline may be, Robertson said the current activity is more in line with historic norms.

"Activity is good; we're seeing that businesses are climbing out of the recession," she said. "Financials are improving and businesses are looking at the opportunity to grow, where they might not have considered it three years ago."

Business Finance Group is a client of Matthews, Carter & Boyce and remains one of the most active lenders in the region, ranking third based on the number of loans it made in the first quarter of the fiscal year.

Read the full article from The Washington Post Capital Business Section.

MCB has over 50 years of experience working with investment companies, government contractors and closely held businesses with SBA loan accounting and compliance needs. Contact an MCB Adviser today at 703.218.3600 to start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.