Diverse Small Businesses Increasingly
Accessing SBA Programs
A steady rise in underserved communities underscores another
year of major accomplishments in Massachusetts
BOSTON – Massachusetts is home
to approximately 615,775 small businesses according to data compiled by SBA’s
Office of Advocacy. The annual Small Business Profiles for the States
and Territories reported that the commonwealth’s small businesses
employed about half -- or 1.4 million of the state’s private workforce in 2012.
Another highlight was that nearly all firms with employees in Massachusetts are
defined ‘small’ by federal standards and eligible to participate in SBA
programs -- making up 97.8 percent of all employers in the state. (Source: Statistics of
U.S. Businesses, U.S. Census Bureau)
“Fiscal year 2015 was a fantastic year
for small business lending in Massachusetts. Our network of lenders and
intermediaries approved 2,591 loans -- while supporting a total of over $645
million through SBA’s business lending programs,” according to an announcement
today by Robert H. Nelson, SBA Massachusetts District Director. “Our two
flagship capital programs, the 7a and 504 -- saw an increase in the number of
approvals by 11.35%, while also increasing the total dollar amount by 10.64%
from the previous year. Additionally, the fee waiver incentive for borrowers
continued helping entrepreneurs that need small dollar loans realize their
dreams, while our underserved markets continued gaining awareness and access to
SBA programs”.
Lending Highlights
The SBA guaranteed 2,342 loans through
its flagship 7(a) Loan Guaranty Program for a total of more
than $317 million supported by a network of 145 lenders. These loans are
available for most legitimate business purposes, including: purchase or
construct real estate, equipment and inventory, to finance fixtures and
leasehold improvements, debt refinancing, and for working capital. Massachusetts
ranked #3 out of 68 SBA offices nationwide in this category, an increase in
dollar amount of 10.89% from FY14.
· Eastern Bank was the #1
SBA 7(a) lender in Massachusetts for the sixth year in a row with 815 loans
totaling more than $46 million and the #1 504 lender with 43 loans totaling
over $31 million. Eastern is also the #1 SBA lender in New England.
· Citizens Bank was the
second highest producer of 7(a) loans with 124 approvals totaling just over $17
million; Berkshire Bank was third with 119 loans totaling over $6.6 million.
Completing the list of top ten SBA lenders in Massachusetts are Rockland Trust
Company, Santander Bank, TD Bank, Leader Bank, Independence Bank, Cambridge
Savings Bank, and South Shore Bank.
The Certified Development
Company/504 Loan Program had 249 loans supporting more than $325
million. SBA 504 loans are used to construct, purchase or rehabilitate real
estate and can also finance machinery and equipment. Massachusetts
ranked #5 out of 68 SBA Offices nationwide in this category.
· Bay Colony Development
Corp. was SBA’s leading Certified Development Company/504 lending partner in
Massachusetts with 80 loans totaling over $40 million, while Granite State
Economic Development Corp. came in second in terms of volume with 77 projects –
but led in dollar amount totaling over $44 million. New England Certified
Development was third with 52 projects totaling over $37 million.
The SBA Microloan Program,
through nine microloan intermediaries approved 76 loans totaling over $1.3 million.
These loans provide up to $50,000 to help small businesses and certain
not-for-profit childcare centers start up and expand; an average microloan is
about $13,000. Accion USA located in Cambridge is the #1 microlender in
Massachusetts for both volume of loans and dollar amount, with 27 loans
totaling over $364 thousand.
Nationally, the U.S. Small
Business Administration 7(a) Loan Program achieved significant milestones in
FY15 with 63,460 7(a) approvals totaling $23.58 billion -- representing an increase
of 21.94% by number of loans approved and 22.89% in dollar amount approved over
fiscal year 2014. The CDC/504 Loan Program approved 5,787 loans totaling
$4.29 billion. Overall, loan numbers increased 19.5% in total number of
approvals and 19.2% in total dollars.
Fee Waiver Impact &
Small-Dollar Lending
During this fiscal year, SBA zeroed out
fees on loans of $150,000 or less and saw a significant spike in small-dollar
lending activity in the state. The fee waiver will continue in fiscal year 2016
as well.
“This year, the SBA fee waiver initiative
was renewed and impacted entrepreneurial growth by helping Massachusetts
business owners save over $1.2 million in fees. This program helped
incentivize borrowers and contributed to the fact that SBA Massachusetts ranked
#1 on loans less than $50,000 in the entire country,” said Seth Goodall, SBA
New England Regional Administrator.
Massachusetts led the nation on small
dollar 7(a) loans, ranking #1 on loans less than $50,000 with
a total of 1,345 approvals; and ranked #2 on loans less than $150,000
and underserved communities with a total 867 approvals.
Underserved Communities
The major achievements highlighting
this year’s success, show steady increases in underserved community lending --
with every minority group achieving strong increases. ‘Underserved’ can include populations from inner
cities, rural areas and segments such as women, minorities, veterans, and
American Indians/Native Americans.
Loan approval data
from our 7(a) Loan Guarantee Program from FY09 to FY15 highlights the following
in Massachusetts:
· American
Indian category had the biggest increase in growth of any
underserved group tracked from FY09 to FY15, increasing 250% -- from 4
approvals in FY09 to 14 approvals in FY15.
· Asian
American & Pacific Islander category had its best
year in FY15 with 177 approvals, while increasing 172.3% from FY09-FY15; 65
approvals in FY09 to 177 approvals in FY15 -- the largest gain in number of
approvals of any minority group from the same period.
· Black/African
American category had its best year in FY15 with 65 approvals.
· Hispanic category
had its best year in FY15 with 124 approvals, while increasing 169.6% from
FY09-FY15; 46 approvals in FY09 to 124 approvals in FY15.
Additional Highlights
· SBIC (Small Business
Investment Company) Program funds in Massachusetts made 144 financings to 71
businesses for $286.4 million. Massachusetts ranked #5 out of 68
offices nationwide for the number of businesses financed.
· SBIR (Small Business
Investment Research) Program granted 85 (phase 1 & 2) awards totaling over
$26.8 million. Massachusetts is #2 out of 68 offices nationwide for number
of awards.
· Surety Bonding Program
issued 80 bonds totaling $47.4 million.
· Federal Contracting
Awards to MA Small Businesses (estimated):
o Small Business: $2.3 billion
o Hub Zone: $67 million
o 8(a): $123 million
o Veterans: $173 million
o Service Disabled Vet: $149 million
o Women $167 million
About
SBA Massachusetts District Office:
SBA’s
District Offices are responsible for the delivery of SBA's many programs and
services throughout the country. Services available include: FREE counseling,
advice and information on starting a business through our resource partners:
SCORE, Center for Women & Enterprise and Massachusetts Small Business
Development Centers; Financial Assistance for new or existing businesses
through guaranteed loans made by area bank and non-bank lenders; Assistance for
businesses owned and operated by socially and economically disadvantaged
individuals qualified for federal procurement opportunities.
For more information about SBA Massachusetts
lending figures in fiscal year 2015, the following resources are available:
SBA Massachusetts will hold an Annual Meeting
honoring lenders at a special awards ceremony at Constant Contact Headquarters
in Waltham on Tuesday, November 10, 2015. For more information, please
visit: www.sba.gov/ma
