Why local SBA lending hit record levels last year

By Metro Chamber|January 18, 2017|News Coverage|

Capital region lending by the Small Business Administration topped its pre-recession peak in 2016, and the Sacramento area has eclipsed California in its pace of small business loan approvals.

Total SBA loans in the Sacramento metro area totaled $312 million in the fiscal year that ended September 2016. That’s a 30 percent increase from the previous fiscal year, and a 20 percent increase over the pre-recession peak of $259 million in 2007.

Meanwhile, the total amount of loans approved for small businesses across the entire state stayed flat at $5 billion from fiscal 2015 to 2016.

The upsurge in Sacramento is a result of local businesses finally cleaning up their balance sheets following the Great Recession to become credit worthy, said Joe McClure, Sacramento district director for the SBA.

Last year also saw local businesses regaining the confidence to begin hiring and making equipment purchases, he said.

“People are not going to borrow unless they feel good about the future,” McClure said. “Most people feel like they will be better off or the same next year.”

A recent survey of small business owners in Sacramento showed broad improvement in confidence about the health of the local economy. However, economists, including San Francisco Federal Reserve Bank CEO John Williams, have cautioned that potential federal policy changes in trade and health care could exacerbate the effects of the next recession in California’s capital.

Businesses interested in qualifying for SBA loans are encouraged to use the Capital Region Small Business Development Center, a free small business consulting service operated by the Sacramento Metro Chamber of Commerce. Since launching two years ago, the SBDC has secured 119 small businesses loans to help create 73 new businesses, the chamber said this week. The SBDC operates eight offices in Sacramento, Placer, El Dorado, Yolo, Sutter, Yuba, Colusa and Lake counties.

Source: Sacramento Business Journal

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