Federally backed lending to small businesses in El Paso County declined slightly in 2018 after back-to-back records in 2016 and 2017, according to a report from the U.S. Small Business Administration.
In the county, 44 lenders made 172 loans totaling $96.9 million through two SA guarantee programs in the federal fiscal year that ended Sept. 30, according to numbers compiled by the agency. That is down 4.7 percent from the 173 loans for a record $101.7 million made by 43 lenders during the previous fiscal year, which easily passed the previous record set in 2006 of 206 loans totaling $89.6 million by nearly four dozen lenders.
Dirk Draper, CEO of the Colorado Springs Chamber & EDC, said the lending numbers show that small business “is thriving in our region. It’s not based on a single employer or a single industry, but rather it’s a broad democratic rise in our business community, and small business is a key ingredient of this rising tide. We’ve added 20,000 jobs in the last four years.”
The slight decline is similar to small drops in lending statewide and across the nation, which the agency said is likely a result of a strong economy that allows “lenders to provider borrowers more conventional credit without the utilization of an SBA guarantee,” according to a news release issued Wednesday by the agency’s Denver office.
Frances Padilla, director of SBA’s Colorado district office, said if a business has “good cash flow, there is less of a need for a (federal) guarantee. We are seeing fewer loans to service businesses and more to asset-based businesses such as construction, remodeling, roofing, electrical and retail.”
The agency’s two primary loan programs include one designed to help small businesses pay the majority of their expenses, including short- and long-term working capital, exports and debt refinancing. A second program provides long-term financing for real estate and equipment purchases.
SBA lending in Colorado fell 1.9 percent to $884.9 million, even as the agency backed eight more loans than the 1,758 last year. The decline ends seven consecutive years of setting annual lending records in the state.
The loans included 390 totaling $189 million to minority-owned businesses, 603 loans totaling $281 million to businesses owned by women and 97 loans totaling $39 million to veteran-owned businesses.
Nationwide, the agency made more than 66,000 loans totaling $30.1 billion in the two programs, down 1.3 percent from the previous year. The agency also launched a 25-year debenture that offers small businesses another five years of financing at a fixed rate, making more than $1 billion available to more than 1,000 borrowers. The agency said it also made more than 6,000 loans totaling $222 million in two programs that make small loans of up to $250,000.
Central Bank & Trust edged out Colorado Lending Source as the top SBA lender in El Paso County with 14 loans for $13.4 million, compared with nine loans from Colorado Lending Source for $12.6 million. The rest of the top five list included Wells Fargo Bank with 29 loans for $8.54 million, Pikes Peak Regional Development Co. with six loans for $7.87 million and Live Oak Banking Co. with three loans for $6.41 million.
Statewide, the top lenders were Colorado Lending Source with 118 loans for $101.8 million, Wells Fargo with 239 loans for $91.5 million, Live Oak with 21 loans for $49.1 million, Hanmi Bank with 54 loans for $38.7 million and Bank of the West with 49 loans for $34.8 million.
“Small business is thriving in our region. It’s not based on a single employer or a single industry, but rather it’s a broad democratic rise in our business community, and small business is a key ingredient of this rising tide. We’ve added 20,000 jobs in the last four years. The indicators we track around jobs and employment are positive with opportunity to grow, so it’s a matter of matching those jobs with individuals with the right skill sets.”