plura Financial Blog

blog for plurafinancial.com, an online matchmaker between banks & small businesses

SBA Loan Statistics for 7A and 504 Loans, through 6/8/2012

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From the blog of pluraFinancial.com, here are the latest SBA loan statistics for SBA 504 and 7A loan approvals, through 6/8/2012:
  • Summary: The 2012 SBA loan trend continues…
    • On a Year-to-Date basis, SBA 7A Loan approvals are down 34% through 6/8/2012 according to sba.gov
      • The 7A Loan’s higher SBA guarantee fees and lower amortization relative to the SBA 504 Loan is attributed to part of the decline in 7A Loans as demand shifts toward 504 Loans.
      • Existing businesses and rural businesses in particular appear to be fleeing SBA 7A loans.
    • SBA 504 Loan approvals are up 27% YOY
      • Borrowers appear to prefer the ability to refinance existing debt, and the relatively low rates & fees associated with SBA 504 Loans
  • A closer look into the numbers: On a YTD basis, total SBA loan approvals were down $4.1 Billion, or 23% YOY
    • SBA 7A Loan approvals were down $4.9B YOY, or 34%, responsible for 100% of the YOY total SBA loan decline
      • 7A Loan approvals to existing business were down $4.1B
        • Loans to Rural businesses were down $1.8 B
        • Loans to Asian-American owned businesses were down $0.9B
        • PLP loans represent ~half of all 7A loans, and were down 57% YOY
      • 7A Loan approvals to startups were down $0.8B
        • Express loans, a popular SBA loan product for startups, were down $0.7B YOY
      • 7A Loans represented 82% of SBA Loans last June, and currently represent 71%.
    • SBA 504 Loan approvals were up $0.8B, or 27% YOY
      • Loans to Existing businesses were responsible for ~90% of the 504 Loan growth.
      • Approvals were up in nearly every SBA 504 loan category (minorities, existing businesses, startups, rural businesses, etc.)
  • Projections: We expect a continued shift toward SBA 504 loans in 2012 given the favorable rates and amortization relative to other SBA loan products.  This assumes the SBA will continue to permit 504 loan proceeds to refinance existing debt.  
-James Timberview/www.plurafinancial.com
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Written by entrabanker

June 21, 2012 at 4:43 pm

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