SBA 504 Lending and Small Business News: August 15, 2016

The SBA is considering issuing a proposed rule amending several regulations related to the 7(a) and 504 loan programs in an effort to streamline the processes. The proposed changes, according to the ABA Banking Journal, include redefining cooperative businesses as eligible for SBA backed loans, providing more lender flexibility on what base rates are determined, and clarifying what fees lenders may or may not collect from loan applicants. The proposal also includes amendments to reflect updated technology, practices, and guidelines. Comments on the proposed changes are due by October 7th.

In its July 2016 senior loan officer survey, the Federal Reserve has found that small business lending standards have remained relatively unchanged over the past three months. 57 percent of participating banks reported no change in their credit standards for businesses with revenues less than $5 million, with 25 percent of participating banks reported easing their credit standards for small businesses. Banks also reported stronger loan demand, citing increases in customer inventory financing needs and investment in plants or equipment.

SBA loan approvals continue to surge in Western New York, reaching a combined value of $126.8 million in July alone. According to data compiled by the SBA’s Buffalo District Office, loan approvals are up 34.7 percent compared to July 2015 data, with dollar volume up 4.5 percent year over year. The Buffalo-headquartered M&T Bank remains the leading lender in the area with 318 approvals through July, which adds up to nearly $25 million in approved SBA loans over the past 10 months. Officials are certain that the number of approvals in the region will top 1,000 by the end of the current federal fiscal year.

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