Lending through the federal Small Business Administration this past fiscal year was up ”” way up, according to administration data.
The amount of small-business loans issued in the state this fiscal year increased by 22 percent over the previous year, with 644 loans made totaling nearly $200 million.
In fiscal year 2014, 527 loans were made totaling more than $177 million.
The news bodes well for the economy and particularly Wells Fargo, which ranked as the highest SBA lender in the state by dollar amount this year with more than $20 million in loans issued.
“We are seeing a gradually improving economy, healthier businesses; an economy that is stabilizing and growing slightly,” Joe Vanella, head of Wells Fargo”™s Small Business Administration Northeast lending division, said. “Businesses have been stronger, we have seen healthier balance sheets in the small biz market and the customers are looking to expand, open new locations, purchase equipment; all of that has spurred an increase in activity.”
While Wells Fargo holds the title for most SBA-backed dollars loaned out in the state ”” a first for the company and a point of pride, Vanella said ”” the most SBA loans were actually issued by Connecticut”™s Farmington Bank with 66 loans totaling more than $5.5 million.
Wells Fargo issued 45 loans in fiscal year 2015, ranking fourth.
While more loans and more money were issued this year, the average loan amount decreased by 14 percent, dropping from nearly $364,000 to just over $311,000 ”” possibly an indication that more small loans are being made to smaller businesses, the heart of the state economy, said William Tierney, a lender relations specialist for the SBA”™s Connecticut district office.
“We are reaching a lot more small business and that is the focal point,” he said.
Michelle Orr, a Wells Fargo business development officer specializing in SBA loans for the Connecticut region, has been part of that focus, She said she has seen an increase in lending activity coupled with a greater emphasis on lender and consumer outreach and education by Wells Fargo.
In the past 12 months, Orr has facilitated loans ranging from $250,000 to $3.7 million, the latter being in Fairfield County for a daycare operation in Stamford.
Conversely, microloans, those under $50,000, were flat in fiscal year 2015 at 39 with a 22 percent decrease across the board for the average loan amount and total funds loaned.
In fiscal year 2014, lenders issued 39 microloans for a total of $1.1 million at an average loan amount of nearly $30,000.
This past fiscal year the average loan amount dropped to almost $24,000 for a total of $900,000.
While Orr has seen an emphasis on real estate lending, Tierney said restaurants and the food industry have comprised the largest segment of SBA loans in the state. He called that an especially important economic indicator.
“They really are the spark of the economy because they employ a lot of folks who otherwise would not have those opportunities for employment. If you see the growth in the food service industry, it means people are spending more and have confidence in the economy. They are going out to eat again. In the recession, they weren”™t doing that,” he said. “People were cutting back on employment and we are starting to see that growth come back again.”
Like Orr and Vanella, Tierney attributes this year”™s increase in lending to a determined focus by the SBA and lenders to educate small businesses owners on the benefits that can be made available to them through SBE lending.
“We have made a lot of progress reaching out to rural lenders, smaller community banks that have just started to utilize our program,” he said. We are trying to make it easier for small businesses to have access to capital.”
To that extent, the SBA plans to roll out a new program called SBA 1 to “get consumers that yes answer much more quickly,” Tierney said, “cutting down on red tape and all the other stuff government is known for.”
