Federally backed loans made to small businesses in El Paso County during the fiscal year that ended Sept. 30 surged 28.7 percent to a record $77.6 million, mostly because local companies took advantage of low interest rates to scoop up office buildings or manufacturing plants for bargain prices.
More than 30 lenders made 163 loans through the U.S. Small Business Administration's guarantee program during the 2013 fiscal year with the amount borrowed breaking the 2011 record by nearly $9 million.
SBA lending also was up in Teller County during the same period - by 40 percent, to $2.1 million - and posted increases both statewide and nationwide.
SBA lending surged this year primarily because borrowers could buy a building for their business at near rock-bottom prices and finance the purchase at the lowest interest rates in decades, said Grant Ary, SBA development officer for Wells Fargo Bank, the top SBA lender in both the El Paso County and Colorado.
"You have both cost-effective pricing on commercial properties and very low interest rates at the same time, and borrowers could fix that rate for up to 25 years. That allowed business owners that were paying rent to buy a property and have a lower monthly loan payment than they were paying in interest," Ary said.
Matt Varilek, administratorof the agency's regional office in Denver, said the nationwide totals for the 2013 fiscal year included a flurry of loans submitted by lenders for approval in September to avoid processing delays if the federal government shut down. He said the 16-day shutdown also created a nationwide backlog of about 700 loans still awaiting processing.
Gary Markle, president of Central Bank & Trust, said his bank would have made more loans if processing had not been delayed by the government shutdown, since the loans had already been approved.
He said lending was strong because an improving economy encouraged more people to buy businesses.
Wells Fargo recaptured the county's top SBA lending title in 2013, making 32 loans with SBA guarantees totaling $10.7 million under the agency's general-purpose lending program, followed by Central Bank, which was the county's top SBA lender during the previous fiscal year. The Pikes Peak Regional Development Corp. was the top lender in the county under the agency's long-term lending program for land, buildings and equipment, making 15 loans for $8.1 million, followed by Colorado Lending Source Ltd.
Statewide, SBA lending was up 11.5 percent from a year earlier to a record $622.6 million in the 2013 fiscal year, surpassing the previous mark set in 2011 by $1.2 million. Most of the increase came in the general purpose lending program, where loan volume jumped 14.4 percent to $457.1 million. Loans in the real estate program increased 4.1 percent to $165.4 million.
Nationwide, SBA loan approvals were up 5.6 percent to $23.1 billion in the 2013 fiscal year, with general purpose approvals surging 17.9 percent and real estate loan approvals falling 22.1 percent.
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