SBA Loan Report Card: 2009 Fiscal Year in Review

As small businesses look to the SBA for guarantees on loans and other assistance in plowing through an intimidating economy, they want to know---what effect has the recession had on SBA's small business loan approval?

With the new fiscal year underway as of October 1st 2009, stats for the past fiscal year are in.  And the grades are decidedly mixed for the Small Business Administration (SBA) when it comes to loan approval.  While overall indicators showed a major drop in total number of SBA loan approvals, a closer look shows significant improvement throughout year leading into the new Q1. 

In total, SBA loans in 2009 were down 56% from 2007 and 36% from 2008.  According to the Wall Street Journal, fewer than 45,000 loans were approved in the past fiscal year.  But before your businesses decides to liquidate assets and close shop, here's a bird's eye view of the numbers:

• In 2007 Q4, SBA loans amounted to $3.7 billion
• In 2008 Q4, SBA loans totaled $3.1 billion
• In 2009 Q4, SBA loans came in at $3.3 billion - showing a marked comeback to past amounts.

And a closer review shows the following results, which trend with major economic events of the past fiscal year:

• Q1 2009 (Oct 1 to Dec 31 2008): $1.9 billion - Lehman Brothers filed for bankruptcy and secondary markets froze leading into Q2.
• Q2 2009 (Jan 1 to Mar 31 2009): $1.6 billion - The American Recovery and Reinvestment Act, which passed in February 2009, significantly dropped fees for loans and guaranteed small business loans up to 90% leading into Q3.
• Q3 2009 (Apr 1 to Jun 30 2009): $2.5 billion - Banks and lenders, which had severely limited lending to small businesses, started loosening purse strings in light of SBA loan guarantees and programs.
• Q4 2009 (Jul 1 to Sept 30 2009): $3.3 billion - Reassured by SBA loan programs, lenders opened up small business lending, including SBA 7(a) loans.  September 2009 witnessed the highest single month of SBA loan approval since August 2007.

Whether you believe small business is the backbone to the American economy or a vestige of the past, it is being infused with new life and new funds.  What small business will do with these resources will remain to be seen, and in the meanwhile, we'll keep an eye on SBA progress reports as the new fiscal year kicks off.

Related Resources:

• Sour Year for SBA Loans Ends With Uptick (Wall Street Journal)
• SBA lending in 2 key programs down in 2009 (TheBusinessJournal)
• The $15 Billion Note: Treasury Department to Buy Up SBA Loans With Federal Bailout Funds (FindLaw's Free Enterprise)
• Small Businesses not Receiving SBA Loan Stimulus; 5 Tips on Getting SBA Loans (FindLaw's Free Enterprise)