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SMB Loans Still Available To Appealing Companies

Written by Ken Gaebler
Published: 10/7/2011

The SBA approved a record-breaking number of small business loans in fiscal 2011, and more SMBs can gain access to capital if they understand how best to approach a lender.

The U.S. Small Business Administration reached the highest mark in the agency's history of small business loan approval volume at $30 billion in the 2011 fiscal year. This achievement was made possible, in part, by the first quarter's record-breaking $12 billion in approved loans, followed by a return to pre-recession loan levels for the next three quarters.

SMB Loan Availability

The agency reported during its fiscal year, which ended September 30, 2011, SBA loan approvals supported $30.5 billion in lending to small businesses and start-ups, compared to $22.6 billion reported in the 2010 fiscal year. The strong surge in the first quarter was prompted by enhancements under the Small Business Jobs Act allowing the SBA to raise the guarantee on its 7(a) loans to 90 percent and waive fees on both the 7(a) loans and the 504 loans for borrowers.

And for small businesses still looking to receive financial aid from the agency or a community bank, it is important the lender knows the company's story and understands that the owner has invested his or her own money in the project and will also have access to capital from other sources besides the financial institution. BusinessWeek reported that small businesses are facing disruptive government policies and stringent lending requirements when they apply for a loan.

The news source recommends small business owners try to find lenders that have been unaffected by recent regulator reforms. These lenders will not be quite as picky on standards and requirements owners will have to meet in order to qualify for a loan. When pitching the company to the lender, it is important to focus heavily on any industry experience the owner or partners bring to the business, as well as how much has been invested in the business from personal finances.

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