Carranza: Nearly nine million loans worth $750 billion stabilized small business sector and put it on the road to recovery
The U.S. Small Business Administration announced Fiscal Year 2020 summary loan data of the financial assistance provided through traditional loan program lending as well as aid provided via the CARES Act. Loans guaranteed through traditional SBA-backed lending programs exceeded $28 billion; however, enactment of the CARES Act dramatically increased loan volume guaranteed by the agency.
In FY20, the Paycheck Protection Program provided an additional 5.2 million loans worth more than $525 billion; the agency’s Economic Injury Disaster Loan Program added another 3.6 million small business loans valued at $191 billion, as well as an additional 5.7 million EIDL Advances worth $20 billion.
SBA’s Utah District Director, Marla Trollan, noted the significant impact of SBA loans programs during the recent pandemic and local natural disasters.
“The last figures we have available through the end of the 2020 fiscal year for Utah show that the SBA has, through its lenders, provided more than 52,000 PPP loans totaling more than $5.2 billion,” she said. “The SBA has directly funded almost 22,000 EIDL loans in the state, totaling over $1.3 billion. SBA EIDL loans have also been made available in many rural communities due to drought conditions. We are looking forward to getting the final numbers and know they will further demonstrate how unprecedented this year was in terms of the vast need of small businesses in the state and SBA’s response to that need.”
In Utah during FY 2020, SBA approved 1,065 traditional SBA loans (7(a) and 504) amounting to almost $626 million in funding to small businesses across the state. The Utah District Office ranked fifth nationally in the number of approved 504 loans and seventh nationally in the dollar amount of approved 504 loans according to the latest SBA data. The final data for PPP and EIDL loans is not yet available as the agency is still verifying the final numbers to be released soon.
“The SBA played a monumental role in supporting small businesses impacted by the COVID-19 pandemic, evidenced by the thousands of Paycheck Protection Program and Economic Injury Disaster Loans approved to urban and rural Utah businesses since March,” said Dan Nordberg, SBA Regional Administrator and National Director of Rural Affairs. “The SBA’s historic lending achievement is a testament not only to the dedicated public servants within the agency, but also to the grit of small business owners and entrepreneurs across the state. The SBA will continue advocating for small businesses and working with business owners and entrepreneurs as we navigate these challenging times.”
“In response to the unprecedented challenges faced by small businesses this year, the Trump Administration provided more than three-quarters of a trillion dollars in financial assistance to support impacted small businesses. SBA lending data further reflects the extraordinary commitment this Administration has made to supporting entrepreneurs in underserved communities,” Administrator Jovita Carranza said.
Highlights from the PPP include:
- 27% of the PPP loan dollars were made in low-and moderate-income communities which is in proportion to the percentage of population in these areas:
- More than $133 billion, or 25%, of PPP loans were approved for small businesses in historically underutilized business zones (HUBZones); and,
- Over $80 billion, or 15%, of total PPP dollars were approved to small businesses in rural communities.
Administrator Carranza further noted, “In addition to the tremendous amount of aid provided by the CARES Act via the PPP and EIDL programs, our regular loan programs showed solid year-over-year improvement, especially within our 504 and Microloan programs. SBA’s small but dedicated team of professionals punched far above its weight this year, building on last year’s lending numbers for traditional loans, while administering the largest and most consequential disaster response effort in modern history – all while overcoming unprecedented workforce disruptions.”
In FY20, SBA’s flagship 7(a) loan program made approximately 42,000 7(a) loans totaling $22.55 billion. The 504 loan program had another year of increased performance, with more than 7,000 loans made for a total dollar amount of more than $5.8 billion. The Microloan Program, which specifically helps businesses in underserved communities, achieved a second straight record year performance with nearly $85 million going to over 5,800 small businesses. Thirty-four percent of Microloans made in FY20 went to black-owned small businesses.
Lending to underserved populations posted another strong year. Lenders reported that minority business owners received $7.5 billion in combined 7(a) and 504 lending, or 27% of SBA’s loan portfolio. Further reported data shows SBA’s 7(a) lending to women-owned businesses was nearly $2.7 billion in FY20 while lending from the 504 loan program to women-owned businesses was over $522 million. Additionally, loans to veterans totaled nearly $835 million for the 7(a) and 504 programs.
“It was a historic year for SBA’s disaster program as we approved and disbursed more than three times as many funds for the COVID-19 EIDL program ($211 billion) as we have for all disasters combined in the agency’s 67-year history ($67 billion),” said Associate Administrator for SBA’s Office of Disaster Assistance James Rivera. “This was also the first time in SBA history that the agency had the statutory authority to declare a pandemic and make disaster loans. SBA took swift action to work with governors, and within a matter of days, the agency issued disaster declarations to all 50 states, five territories and the District of Columbia.”
Also of note was SBA’s Office of Investment and Innovation, which licensed 26 Small Business Investment Companies with $2.1 billion in private capital during FY20. This was a 44% increase in the number of new licensees and a 72% increase in private capital from new licensees compared to FY2019. The improvement was due in large degree to eliminating procedural delays and unnecessary (duplicative) clearances. The combined private capital and SBA backed funds now totals $32 billion, the highest in the history of the SBIC Debenture Program. One additional highlight of the SBIC program’s success was the awarding of the first license in nearly two decades to a majority-minority owned and minority operated SBIC in Puerto Rico.
“2020 marked a significant improvement in our execution capabilities as compared to 2019. Our pipeline of applicants looks strong and we anticipate continued success in supporting America’s small businesses in this time of difficulty,” stated Associate Administrator for SBA’s Office of Investment and Innovation Donald DeFosset III.
For more information about SBA’s loan programs, financial assistance and other services, visit www.sba.gov.