PROVIDENCE — Halfway through the current fiscal year, the U.S. Small Business Administration has guaranteed 7.5 percent less in loans to local businesses, even as the total dollar volume directed to the small business community through SBA-supported and -related programs has increased slightly year to date from fiscal 2017 to fiscal 2018.
Data from the SBA’s Rhode Island District Office show that small businesses in the region received $55.2 million in SBA-backed and non-backed loans between Oct. 1, 2017, and March 31, 2018, a 0.5 percent rise from the $54.9 million the SBA backed between Oct. 1, 2016, and March 31, 2017.
SBA-backed loans through the 7(a) program as well as through certified development companies have totaled $38.8 million through the first six months of fiscal 2018, compared with $41.9 million in the same year-earlier period. The number of SBA-backed loans modestly in that time period, rising to 228 from 217 a year earlier.
All the loans were issued through the SBA’s three programs:
- The 7(a), which guarantees loans of up to $5 million to fund startup costs, repair existing capital and refinance existing debt among others
- The 504, which is used for purchasing land, existing buildings, long-term machinery or renovating current facilities
- The microloan, which aids small businesses and eligible nonprofits
Both the number and dollar volume of loans through the 7(a) program, which are made by lending institutions and backed by the SBA, fell over the year. Total dollar volume declined 19.6 percent to $25.8 million, as 184 loans were made, compared with 190 a year earlier.
Loans from CDCs grew from 22 to 31 year to date, with a 32.2 percent increase in their value to $12.8 million. The un-supported loans associated with the program totaled $16.4 million, a year-over-year increase of 26.7 percent.
There was a shift in which banks have been issuing out loans. Independence Bank made the most 7(a) loans through the first six months of this fiscal year, with 39 loans totaling $3 million, more than tripling their output this time a year ago. Coastway Community Bank was second with 24 7(a) loans totaling $3.2 million. Newtek Small Business Finance has loaned out the most so far in fiscal 2018, with 3 loans totaling $3.4 million.
Citizens Bank, which made 46 7(a) loans totaling $5.1 million through the first half of fiscal 2017 has so far made 23 loans totaling $2.4 million year to date.
Ocean State Business Development Authority made the most 504 loans this fiscal year, with 13 for a total value of $5 million. Bay Colony Development Corp. has made 10 such loans totaling $3.9 million.
BankNewport lead banks with the most direct 504 loans made, eight for a total of $3.2 million, followed by Centreville Bank with four loans issued. Coastway has the second-most loan amount total, $2.4 million.
There was also a large increase in SBA microloans issued. Three entities – Community Investment Corp., South Eastern Economic Development Corp. and Accion – made a total of 13 loans for a combined. That’s eight more loans and $45,000 more issued than at this time last year.
Regarding individual municipalities, Providence again leads with 43 total loans made, for a total of $9.7 million. At the same time last year, businesses in the the city had received 35 loans totaling $5.5 million. Warwick is second on the list, with 27 loans totaling $5 million and Cranston is third with 19 loans, for a total of $4.4 million. Exeter has the state’s third-highest loan amount, with four loans totaling $4.6 million.
James Bessette is a PBN staff writer. Email him at research@pbn.com.
