SBA reports FY2017 loan decline in R.I., as Citizens leads lenders

The U.S. Small Business Administration supported loans worth $89.9 million to local businesses in the fiscal year ended Sept. 30.
The U.S. Small Business Administration supported loans worth $89.9 million to local businesses in the fiscal year ended Sept. 30.

PROVIDENCE – The U.S. Small Business Administration supported loans totaling $89.9 million to Rhode Island businesses in the fiscal year that ended Sept. 30, a decrease of 5.1 percent from the $94.7 million loaned in the same period last year.

According to SBA data for the Rhode Island District Office, there were a total of 414 SBA-backed loans made in Rhode island from Oct. 1, 2016, to Sept. 30, 2017, marking a 9.6 percent decrease from last year’s 458 SBA-backed loans. The total dollar volume awarded through SBA programs to Rhode Island businesses was $131,899,940, according to the SBA, a nominal overall decrease from the $131,929,682 granted last year.

The loans were granted through the SBA’s three loan programs: 7(a) general purpose loans designed to help businesses gain working capital, 504 loans intended to help businesses finance fixed-asset purchases, and microloans for small businesses and certain nonprofits.

The decrease in the number of loans year over year was reflected in the number of 7(a) loans granted to local businesses, which fell to 351 from 400. In fiscal 2017, 46 commercial lenders made $60.3 million in 7(a) loans, compared with a total of $67.3 million made in fiscal 2016.

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There was an increase in the total dollar amount of unsupported loans made through the 504 program, to $42 million from $37.2 million. The number of 504 loans increased by one transaction to 51 year over year. The 504 program is split three ways between a small business borrower (who puts up 10 percent), a lender (which puts up 50 percent of its own capital), and a 40 percent SBA-backed contribution from a certified development company.

SBA microlending also grew from fiscal 2016 to fiscal 2017, increasing from eight microloans for $199,000 in 2016 to 12 loans for $290,524 in 2017, a 45 percent growth in total dollar amount and 50 percent growth in number of microloans approved.

“Ensuring those in the small business community have access to capital is our main objective,” said SBA regional administrator and district director Mark S. Hayward. “These numbers shoe a growing number of lending institutions using SBA programs an in turn demonstrates that now more than ever small business owners have the access to the funds they need.”

Citizens Bank made the most 7(a) loans this year with 70 loans totaling $8 million, followed by Coastway Community Bank with 45 for $4.6 million. Centreville Bank had the highest dollar amount of 504 loans, with 14 loans totaling $15.3 million.

Ocean State Business Development Authority saw the highest number of SBA-supported 504 loans – 20 transactions for a total dollar amount of $14.4 million.

Broken down by city, Providence had the largest number of loans at 72 (an increase from 69 last year), as well as the highest dollar volume at $25.6 million. Warwick came in second again this year with 45 loans, one more than last year, totaling $13.4 million. In third place, Cranston had 23 loans this year, a drop from 28, for $4.9 million.

Nicole Dotzenrod is a PBN staff writer.

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