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57.6 F
San Diego
Tuesday, May 28, 2024

SBA District Sees Drop in Dollar Value of Loans

The value of loans guaranteed by the U.S. Small Business Administration’s San Diego district office declined by $92 million for the first half of this fiscal year, though the number of loans approved increased by 3.5 percent compared to a year ago.

District Director Ruben Garcia said despite the decline, both in the number of loans and monetary value, should pick up this summer. The office covers both San Diego and Imperial counties.

“Traditionally, June, July and August are some of the strongest months for this office, especially in the numbers of 504 loans that can be used for major equipment purchases and property acquisition,” Garcia said.

For the first half of the fiscal year ended March 31, the SBA approved 981 loans, up 3.5 percent from 947 loans last year.

In terms of dollars, the loans equaled $148.5 million, down 38 percent from the prior when it approved $240.2 million in loans.

The figures include the two major loan programs offered by SBA-sponsored lenders, the 7(a) program that provides funds for general capital purposes, and the 504 program, for buying real estate and equipment.

Garcia said his district office might still break last fiscal year’s record volume of loans and dollar amounts when it approved 1,395 loans for $401 million.

Nationally, the SBA approved 50,065 loans for the most recent quarter ended March 31 for a total of $9.4 billion.

For the first half the year, the largest SBA lender in the San Diego district in terms of number of loans was Bank of America, which wrote 97 loans for $3.6 million.

On a dollar basis, the largest lender was CDC Small Business Finance Corp., which approved 94 loans for a total of $66.5 million.

Garcia said his office has been busy during much of the first half, not only with its regular business from more than two dozen different lenders, but helping to process applications submitted under a national disaster loan program instituted last year after the Gulf Coast hurricanes.

The tremendous backlog of work prompted the SBA to enlist the help of other district offices to review and process the loan requests.

“At one point we were doing about 130 (additional) loan applications in a week,” Garcia said.

The San Diego office processed 300 disaster loan requests. According to the SBA, from last September through June 7, it approved 150,612 disaster loans valued at $9.8 billion.

The number included 21,436 loans to businesses damaged by hurricanes Katrina, Rita and Wilma. A much larger number of loans were made to homeowners and renters whose homes were damaged.

Although the SBA has processed and given approval on many loans, the agency has been roundly criticized for not actually disbursing the funds to borrowers.

As of last month, only $267 million had been disbursed to approved borrowers under the disaster loan program aimed at helping people in the affected states of Louisiana, Mississippi, Florida, Texas and Alabama.

Garcia, who took over the director position in January following the retirement of longtime director George Chandler, said his office is still ranked among the best of the nation’s 70 district offices. The offices are scored for 39 different categories that include everything from loan results to the number of meetings of its SCORE (Service Corps of Retired Executives) program with business owners.

Last year the local office was ranked first in the nation, but by the end of the first quarter, it had dropped to No. 27, Garcia said.

“When I came in, I challenged them to keep reaching for success,” Garcia said. “I said that they were once No. 1, and that they could keep that ranking if they just keep doing what they were doing.”


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