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Small Business Lending Improving

Florida First Capital Finance Corporation (FFCFC) posted this release today as sent by the SBA. The winds of capital access are blowing better.

Small Business Lending Beginning to See Upswing

It’s finally happening. Efforts to get money to capital-strapped small businesses are beginning to work as banks have returned to making loans backed by the federal government, according to Karen Mills, the new Small Business Administration (SBA) head.

More than 10,000 loans have been approved following the February enactment of the American Recovery and Reinvestment Act of 2009 (ARRA), representing about $3 billion in credit support for small businesses, Mills recently reported during a Senate briefing on the SBA’s efforts under ARRA.

Since February, more than half of the $730 million in ARRA funding has been put to use to make it easier for small business owners to borrow. This is being achieved mainly through the reduction of SBA loan fees as well as increasing the guarantee the SBA provides lenders in case of loan defaults. Weekly loan volume in the SBA’s two most popular lending programs is up 25% to $217 million since March 16, 2009, when the funds were made available, compared to the $171 million approved in the weeks before mid-March, according to SBA reports.

SBA Administrator Mills attributes the increase in volume to the fact that some 1,200 lenders are returning to the SBA loan programs while other lenders are participating for the first time. This is a positive sign, she notes, since more than 360 lenders had not made an SBA-backed loan since October (and almost half of these lenders had not made a loan for more than two years).

Locally, Florida First Capital is beginning to see an upswing in loan production with more and more lending partners across the state ramping up loan production pipelines to assist credit hungry small businesses.

“In Florida we have seen a steady increase in the demand for SBA 504 loans,” said Todd Kocourek, FFCFC President & CEO. “Small business owners are becoming more and more confident about the direction this recovery is heading and are taking advantage of the opportunities offered by the historically low rates and the affordability of waived fees that are currently part of the program,” he said. 

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