SBA Secures Historic Small Business Loans
$ 750 billion in loans stabilized the small business sector and put it on the path to recovery
October 30, 2020
The US Small Business Administration has announced summary loan data for fiscal 2020, which includes financial assistance provided through the traditional loan program as well as additional assistance provided through the CARES Act. The 2020 financial year runs from October 1, 2019 to September 30, 2020.
Loans guaranteed by traditional SBA lending programs exceeded $ 28 billion; however, the enactment of the CARES Act dramatically increased this number by significantly increasing the volume of secured loans.
For example, in the recently closed fiscal year, the Paycheck Protection Program (PPP) granted an additional 5.2 million loans worth over $ 525 billion nationwide. The SBA Economic Injury Disaster Loan (EIDL) program, which is administered by the agency’s Disaster Assistance Office, added 3.6 million small business loans worth $ 191 billion. To this is added the additional 5.7 million EIDL advances worth $ 20 billion. Since the last disaster assistance report, New Jersey has seen more than 120,000 EIDL loans approved for more than $ 7 billion.
“In response to the unprecedented challenges facing small businesses this year, the Trump administration has provided more than three-quarters of a trillion dollars in financial assistance to support affected small businesses. The SBA loan data further reflects the extraordinary commitment this administration has made to supporting entrepreneurs in underserved communities, ”said SBA Administrator Jovita Carranza.
Highlights of the PPP include:
- 27% of the PPP loan dollars were made in low and moderate income communities, which is proportional to the percentage of the population in these areas:
- Over $ 133 billion, or 25%, of PPP loans have been approved for small businesses in historically underutilized business zones (HUBZones); and,
- Over $ 80 billion, or 15%, of the total P3 amount has been approved for small businesses in rural communities.
“In addition to the enormous amount of assistance provided by the CARES Act through the PPP and EIDL loan programs, our regular loan programs have shown solid improvement year over year, especially in our 504 programs. and microcredit, ”added Carranza.
In just six days, the SBA built and launched the largest economic response program for small businesses – the Paycheck Protection Program (PPP). The SBA has issued more than 3.6 million Covid-19 EIDL loans worth over $ 190 billion to small businesses and nonprofits affected by the pandemic, providing them with much-needed working capital to low interest rates without any payment for an entire year.
Additionally, the SBA issued 5.7 million EIDL advances worth $ 20 billion. Although the paycheck protection program application period set by Congress has ended and the EIDL Advance credits have completely expired, the agency is still accepting applications for an economic disaster loan until at the end of December.
“The SBA mobilized the largest public-private disaster response in modern history. The agency built and launched the largest small business economic response program in American history in just six days, ”said Steve Bulger, regional administrator for SBA Atlantic & Mid-Atlantic.
“PPP loans have supported more than five million affected small businesses – and over 157,000 New Jersey small businesses with $ 17.3 billion – enabling them to adjust to keep their workers paid, to receive their health care and social benefits, in a changing economic environment, ”Bulger noted. “In the past fiscal year, the SBA approved more loans – in value and volume – than it has had in the agency’s 67-year history.”
Lenders reported that minority business owners received $ 7.5 billion in combined 7 (a) and 504 loans, or 27 percent percent of the SBA’s loan portfolio. The 504 loan program experienced another year of increased performance, with more than 7,000 loans issued for a total amount of over $ 5.8 billion, or about 17.5% in year-over-year dollars. other. In September, the SBA approved more than $ 1 billion in 504 loans, setting a record monthly volume.
Other published data shows that SBA’s 7 (a) loans to women-owned businesses totaled nearly $ 2.7 billion in FY2020, while loans program loans 504 women-owned businesses totaled more than $ 522 million. In addition, loans to veterans totaled nearly $ 835 million for the 7 (a) and 504 programs.
In FY20, the SBA’s flagship 7 (a) loan program made approximately 42,000 7 (a) loans for a total of $ 22.55 billion. The 504 loan program had another year of increased performance, with more than 7,000 loans issued for a total amount of over $ 5.8 billion. The microcredit program, which specifically helps businesses in underserved communities, achieved a second consecutive year of record performance with nearly $ 85 million going to more than 5,800 small businesses. Thirty-four percent of microloans made in FY20 went to small black-owned businesses.
Lending to underserved populations had another strong year. Lenders reported that minority business owners received $ 7.5 billion in combined 7 (a) and 504 loans, or 27 percent percent of the SBA’s loan portfolio. Other reported data shows that SBA’s 7 (a) loans to women-owned businesses amounted to nearly $ 2.7 billion in FY20, while loans program loans 504 women-owned businesses totaled more than $ 522 million. In addition, loans to veterans totaled nearly $ 835 million for the 7 (a) and 504 programs.
“The combined EIDL and PPP loans represented more than 278,000 loans worth $ 17.3 billion that have gone to New Jersey small business owners,” said SBA New Jersey district manager Al Titone. “Matt and Lauren Borawski, owners of Child Play’s Challenge Courses, have used both programs to pivot and recover from the damaging effects of COVID-19 on our economy. “
Today, the owners of the Scotch Plains-based business that offers obstacle courses for children’s birthday parties, special events, corporate team building and academic enrichment programs have used the SBA programs to help stay afloat until they can put in place COVID-19 safety protocols for Child’s Play Challenge Course. Switching to all outdoor venues, social distancing, wearing face masks and sanitizing gear, an EPA-approved cleanser for recommended contact time allowed the couple to book 101 events in October, a 248% increase from last year’s bookings in October.
“It’s refreshing to see a small business like Child’s Play Challenge Courses using the programs that have been put in place to give businesses exactly what they need to keep going. However, it was the Borawski’s determination, ingenuity and creativity that helped them restart, ”added Titone.
For more information on SBA loan programs, financial aid, and other services, visit www.sba.gov.
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