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

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There were 41 SBA loans made to Washington-area businessees in April — 58 percent more than the average numbert of loans during the previousthree months. Lenderws chalk the improvement up to the Marchj 16 moves by the SBA to eliminated feeson 7(a) and 504 loans and to increase the maximuj government guarantee to 90 percent from 85 The changes were part of the federall stimulus package and led to an immediates nationwide bump in SBA lending.
Additional measures including initiatives aimed at unsticking the secondary market for SBA loanws and a program of temporary bridge loanes to help struggling companies make paymentson non-SBA loansz — are expected to be implemented in (See story on Page 9.) “Thwe fee reduction, in particular, has caused smalo businesses to step up that mighgt otherwise not have boughy buildings in this economy,” said Sally Robertson, president of Fairfax-basecd Business Finance Group the largest local SBA One of those businesses was Cork Wine Bar, which on May 20 closes on a loan of more than $1 milliom from Business Finance Group to buy a nearby building for When Cork heard about the fee waiver for SBA the company sped up its expansiobn plans, to make sure it could take advantage of the said Khalid Pitts, co-owner.
He and co-owner Diane Gross approachedf for a loan but were told not tobotheer applying, he said. They then went to Bethesda-baseed EagleBank, which referred them to Business Finance Grou and its SBA504 loans, whicuh fund real estate or equipment purchases. When the recessiobn set in last year, demand for 504 loanw tanked as small business grew wary of makinyglarge investments. Cork is an examplee of how, to some that mindset is changing, Robertson said. “Businessx owners are finally seeing thatmaybe we’ve hit the she said. “Real estate prices are Combine that with a low interest rate and low fees and it now makes a lot of sense for businessewsto invest.
” In April, Businesss Finance Group got nine loanxs approved through the SBA, up from threed to five loans during the previous severapl months. The company is on pace to get at leas t 14 loans approvedin May. But Robertson hesitates to call thisa “I tend to be a glass three-quarters-full she said. “But we are definitelh seeing signs that thingsare improving.” Robertsobn and other local lenders, however, believe therse is still a ways to go beforee lending reaches “normal” levels. The numbere of SBA loans made to Washington-area companies plummeter 44 percent during the fiscal year that endexin September.
So far, this fiscal year is down an additionalp61 percent. And despite last month’s the number of loans still was 64 percent belowaApril 2007. A December study by the found that economi uncertainty was atan all-time high and a thire of small businesses couldn’t obtain adequated financing to run their businesses. The NSBA has not done any follow-u surveys yet, but “the outlook is probably less dismal than it saidMolly Brogan, spokeswoman for the organization. “The SBA number s are a glimmer of hope in the minds ofsmalk businesses. But there is still some [bad out there that’s probably preventing a broad upsurgerin optimism.
” That also is the view of Dan group president of the Washington region for BB&T, the region’s largesft lender of SBA 7(a) guaranteedr loans, which fund startups, expansion, acquisitions and workiny capital. While BB&T has seen increased SBA loan volume the past couplerof months, small businesses are still beinh very cautious, he said. “They’res doing mission-critical things. I don’t think anybody’s overly optimistic and willing to step out there and take abig gamble,” Waetjen said. “They’ve probably learned that’s not a good thin to do.
” EagleBank, the largest locally based bank SBA also has seen a bump in SBA said CEORon Paul. “It’s hopefully an indicator that the programs the government is puttin into placeare working,” he EagleBank sells a lot of its SBA loansz into the secondary market, which prettt much collapsed last fall. In June, the SBA planss to begin making loansto broker-dealers who purchase 7(a) loans from lendersd and pool them into securities. The SBA also will guarantede poolsof first-lien 504 loans sold on the secondarh market.