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SBA Loans Decrease in Number, Double in Size

| Written by Stacy Mitchell | No Comments | Updated on Apr 15, 2014 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/sba-loans-decrease-number-double-size/

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Over the last few years, the U.S. Small Business Administration (SBA) has dramatically reduced its support for smaller small businesses and shifted more of its loan guarantees to larger small businesses.  (The SBA’s definition of a “small” business varies by sector, but can be quite large.  Retailers in certain categories, for example, can have up to $21 million in annual sales and still be counted as small businesses.)  Under the SBA’s flagship 7(a) loan program, the number of loans for less than $150,000 has declined precipitously.  In the mid 2000s, the SBA guaranteed about 80,000 of these loans each year, and their total value accounted for about 25 percent of the loans made under the program.  By 2013, that had dropped to 24,000 loans comprising just 8 percent of total 7(a) loan volume.  Meanwhile, the average loan size in the program doubled, from $180,000 in 2005 to $362,000 in 2013.

 

 

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About Stacy Mitchell

Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance, where she directs initiatives on independent business and community banking. She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her recent TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

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