Get Started: SBA-backed lending down slightly

SMALL COMPANIES BORROW LESS THROUGH SBA

The Small Business Administration says small companies borrowed $30.25 billion through its loan guarantee programs in the fiscal year that ended Sept. 30, down slightly from the $30.5 billion borrowed in the previous fiscal year, when the number of loans was boosted by the Small Business Jobs Act of 2010.

The SBA's Certified Development Company loan program, also known as the 504 program, set a record in the latest fiscal year, with nearly $15.1 billion in loans granted. The number of 504 loans was increased by a temporary program that allowed small businesses to refinance existing 504 loans for any reason. Normally, the loans, which are used for fixed assets like equipment or real estate, can only be refinanced if a company is expanding. The temporary program authorized by the Jobs Act was intended to give small businesses more cash to meet their needs.

The agency also guaranteed nearly $15.2 billion under its 7(a) General Business Loan Program. These loans can be used for a variety of purposes, including the purchase of equipment or the payment of a company's bills.

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MORE SMALL BUSINESS LOAN APPROVALS EXPECTED

More than 40 percent of bank risk managers said they expect small business loan approval rates to increase over the next six months, according to a recent survey. That's an improvement from the second quarter when more thought approval rates would stay the same, according to results of the latest quarterly survey by FICO and the Professional Risk Managers International Association.

But that change in attitude won't necessarily translate to an outpouring of credit. Less than half said they expect the amount of credit extended to small businesses to increase over the next six months. Only 19 percent, however, said they think the amount will decrease, compared with 29 percent a year ago.

Lending rates and amounts for small businesses are a key component of the economic recovery. Hiring has been spotty and many firms blame a lack of access to capital for preventing them from expanding, innovating and adding jobs.

Other recent survey results confirm that many small businesses don't want to borrow because of uncertain economic conditions. Those that do are still having a hard time getting loans.

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INVESMENT MATCHING PROGRAM DEADLINE NEAR

Bank of America Corp. is seeking out small business owners for a free inner city investment capital program.

The Inner City Capital Connections Program, which is sponsored by Bank of America and the Initiative for a Competitive Inner City, helps educate companies about sources of growth capital and matches them with possible investors.

To be eligible, companies must be based, or have a majority of their physical operations presence, in an economically distressed urban area; be a for-profit entity with revenue of more than $2 million last year or have 40 percent of its workers in an economically distressed area.

There were more than 1,500 companies nominated for the program last year and 171 were accepted.

Small business owners interested in participating in the program must submit an application by Friday, Oct. 19. To apply go to: http://www.icic-iccc.org/companyform.aspx

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