The Connecticut District Office of the U.S. Small Business Administration (SBA) reached over $368 million in lending to small businesses through more than 768 traditional loans during fiscal year FY2021 (October 2020 to September 2021) ”“ its highest volume in over five years.
“The historic activity in SBA”™s traditional loan programs is due to the cooperation of our state, regional and national lending institutions, along with the efforts of our resource partners across the state that are dedicated to maintaining equitable access to capital for Connecticut”™s small businesses and entrepreneurs,” said Connecticut SBA District Director Catherine Marx.
Among the newly released data:
- $294 million in 7(a) loans supported 632 small businesses. The highest approved 7(a) loan volume in the past five years (FY 2017-2021) represents a 78% increase over $165 million in volume for FY2020.
- $71 million in 504 loans supported 86 small businesses. The highest approved 504 loan volume in the past five years (FY2017-2021) was a 79% increase over $40 million in volume for FY 2020.
- $1 million in Microlending Loans funding supported 41 small businesses.61% of microlending loans went to underserved communities including Asian-Owned, Black-Owned and Hispanic-Owned Small Businesses.
“In FY2022, the SBA along with multi-level stake holders will increase efforts to expand access and promote lending programs to reach underserved communities and persons otherwise adversely affected by persistent poverty or inequality,” Marx said.
The SBA”™s 7(a) program assists lenders to make small business loans, in which the SBA guarantees a certain portion of the small business loan will be repaid if the borrower defaults. An SBA guaranteed loan offers borrowers the potential for a lower equity injection and longer amortization with interest rates capped by the government.
The SBA”™s 504 loan program is a public-private partnership designed to provide attractive, fixed interest rate loans on large equipment and real estate projects for small businesses. Under this program, private lenders provide 50% of the project”™s financing, with the SBA supplying up to 40% and the small business 10%. With the 504 programs, the SBA works with a Certified Development Company (CDC), a private, nonprofit corporation to support financing to small businesses.
