The number of loans guaranteed by the Small Business Administration declined sharply in the fiscal year ending Sept. 30, amid a climate of tightened credit by commercial lenders, declining creditworthiness and reduced demand for loans by small business borrowers.
After approving a record 110,000 loans in 2007, SBA’s approvals dropped nearly 30% in 2008. Loan volume had set new records in each of the five previous years. The dollar value of loans dropped 13% from $20.6 billion in 2007 to $17.96 billion in 2008. Average loan size, however, increased almost 29%, from $142,000 to $183,000. The SBA said the increase in average loan size may contribute to expanding more sustainable and successful small businesses.
The SBA is holding meetings across the country to explore how the agency can work with lenders and small businesses to help them during the economic downturn. More information is available at www.sba.gov.