Proof that credit is tight? Local SBA loans plummet
Number of loans in key program down 22% in Charlotte and statewide
The number and value of Small Business Administration loans in Charlotte took a nosedive in 2008 — just a year after setting records.
Stricter lending guidelines and sagging participation from larger banks were key factors in the decline. And small businesses are expected to face the same challenges next year, the SBA and lenders agree.
The SBA processed 316 7(a) loans worth $66.8 million in the Charlotte metro area through Sept. 30, the end of the fiscal year. That’s a 22% decline in total loan value from 2007, when the program reported 459 loans worth $86.4 million, an all-time high.
The 7(a) loan is the SBA’s most popular program. The loan, issued by commercial lenders, is guaranteed up to 85% by the SBA and can be used to finance startup costs, expansions and working capital. It is often awarded to borrowers not eligible for private bank loans.
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