The Mortgage Roadmap

Sudden Rise in the US SBA Loan Volume

9th February, 2011 - Posted by admin - No Comments

The number of SBA loans in the US have surged as companies moved to utilize higher guarantees and reduced fees on SBA loans before those perks expired. Banks in Connecticut almost doubled their output of SBA loans last month, underwriting 103 deals worth about $54 million, compared to 65 deals worth $14.4 million a year earlier.
This increase is due to the failure of Congress in appropriating more money to provide larger loan guarantees and reduced fees, which were originally enacted as part of the stimulus bill. As a result, the government guarantee on the SBA's 7(a) loan program, which is aimed at businesses in rural/urban areas as well as exporters, has declined from 90 percent to 75 percent, which means lenders will have to shoulder more risk to underwrite loans.