WASHINGTON – The Obama administration has for the third consecutive year approved a smaller volume of government-backed small-business loans.
Small Business Administration officials this past year approved federal guarantees supporting $28.6 billion in small-business loans, according to SBA figures. That’s about $1 billion short of last year’s total and down from an all-time peak of $30.5 billion in fiscal 2011.
Generally considered the agency’s top priority, the loan programs are meant to encourage banks to provide capital to small businesses that might otherwise struggle to secure credit.
Despite the recent decline, there is a silver lining.
While the total dollar figure has dropped in each of the past three years, the number of loans approved for guarantees has increased in each of those years. This past year, nearly 58,000 loan applications were approved, up from 54,106 last year and 53,848 in 2012. So, more small firms are receiving capital even though the amount they’re receiving may have shrunk.
Moreover, small-dollar loans are what many small businesses have been saying they can’t get their hands on, especially in the wake of the financial crisis. Data from the Federal Deposit Insurance Corp. echoes that, showing that small commercial loans are down about 20 percent since the years preceding the recession, even as banks’ total commercial loan balances have expanded.
