SBA Achieves Historic Small Business Lending for Fiscal Year 2020 with More Than $1.4 Billion in SBA Alaska District
Carranza: Nearly 9 million loans worth $750 billion stabilized small business sector, put it on the road to recovery
ANCHORAGE, Alaska – The U.S. Small Business Administration (SBA) Alaska District announces FY20 summary loan data of the financial assistance provided through traditional loan program lending as well as aid provided via the CARES Act.
Loans guaranteed through traditional SBA lending programs – which guarantee loans to small businesses that would otherwise not have had access to capital – remained strong and increased in several areas. Additionally, the enactment of the CARES Act dramatically increased loan volume provided by the SBA.
The following is a summary of local and national loan totals:
SBA Loan Summary FY20
National and SBA Alaska District Loan Numbers and Volume
|SBA Alaska District||National|
|Loan Numbers||Loan Volume||Loan Numbers||Loan Volume|
|7(a) Loans||73||$30.3 million||42,000||$22.5 billion|
|504 Loans||9||$5.6 million||7,000||$5.8 billion|
|Total Traditional Lending||82||$35.9 million||54,800||$28 billion|
|PPP Loans (CARES Act)||12,082||$1.3 billion||5.2 million||$525 billion|
|EIDL (COVID-19)||7,588||$451.1 million||3.6 million||$191 billion|
|EIDL Advance (CARES Act)||10,389||$32.7 million||5.7 million||$20 billion|
|Total COVID-19 Relief Loans||30,059||$1.38 billion||14.5 million||$736 billion|
|Total FY 2020 Financing||30,141||$1.4 billion||14.5 million||$764 billion|
“The SBA channeled more than $32 billion to Pacific Northwest small businesses during the Fiscal Year 2020, a capital infusion, unlike our region, has ever seen before,” SBA Pacific Northwest Regional Administrator Jeremy Field said. “By working together with SBA lending and resource partners, the SBA has delivered on its promise to our region’s entrepreneurs to empower them at every stage of their business lifecycle, including recovery. Backed by the strength and stability of the federal government, our team will continue to connect small businesses with the financing they need to fuel the economy.”
The SBA’s flagship 7(a) Loan Program – which can be used for working capital, lines of credit and many other business purposes – had similar loan volume in FY20 compared to the previous fiscal year.
The 504 Loan Program – which helps small businesses acquire fixed assets to promote economic development in the form of long-term fixed-rate financing for fixed assets on reasonable terms up to $5.5 million – had another year of increased performance growing 17.5% from the previous fiscal year.
The Microloan Program – which specifically helps businesses in underserved communities with loans ranging from $500 to $50,000 – achieved a second straight record year performance and increased 4.3% from the previous fiscal year. Additionally, 34% of microloans made in FY20 went to Black-owned small businesses.
The Paycheck Protection Program (PPP) is a forgivable loan program created by the CARES Act and implemented by the SBA and Treasury to primarily finance payroll for small businesses impacted by the Coronavirus pandemic. Highlights from the PPP include:
- 27% of PPP loan volume was in low-and moderate-income communities, which is in proportion to the percentage of population in these areas.
- More than $133 billion, or 25%, of PPP loans were approved for small businesses in Historically Underutilized Business Zones (HUBZones).
- More than $80 billion, or 15%, of total PPP dollars were approved to small businesses in rural communities.
The Economic Injury Disaster Loan (EIDL) – which provides low-interest loans to businesses impacted by a disaster – and EIDL Advance – an up to $10,000 loan advance established through the CARES Act – had a historic year approving and disbursing more than three times as many funds for the COVID-19 EIDL program ($211 billion total) as the agency has for all disasters combined in the SBA’s 67-year history ($67 billion). This was also the first time in SBA history that the agency had the statutory authority to declare a pandemic and make disaster loans.
Lending to underserved populations posted another strong year. Lenders reported that minority business owners received $7.5 billion in combined 7(a) and 504 lending, or 27% of the SBA loan portfolio.
Further reported data shows SBA 7(a) lending to women-owned businesses was nearly $2.7 billion in FY20 while lending from the 504 loan program to women-owned businesses was more than $522 million. Additionally, loans to veterans totaled nearly $835 million for the 7(a) and 504 programs.
“In response to the unprecedented challenges faced by small businesses this year, the Trump Administration provided more than three-quarters of a trillion dollars in financial assistance to support impacted small businesses. SBA lending data further reflects the extraordinary commitment this Administration has made to supporting entrepreneurs in underserved communities,” SBA Administrator Jovita Carranza said.
Also of note was the SBA Office of Investment and Innovation, which licensed 26 Small Business Investment Companies (SBICs) with $2.1 billion in private capital during FY20. This was a 44% increase in the number of new licensees and a 72% increase in private capital from new licensees compared to FY19.
The improvement was due in large degree to eliminating procedural delays and unnecessary (duplicative) clearances. The combined private capital and SBA-backed funds now totals $32 billion, the highest in the history of the SBIC Debenture Program. One additional highlight of the SBIC program’s success was the awarding of the first license in nearly two decades to a majority-minority owned and minority operated SBIC in Puerto Rico.