SBA reports pickup in lending activity

TD Bank approved the most Small Business Administration loans in New Jersey in the fiscal year ended Sept. 30, when the Cherry Hill-based bank made 168 SBA loans totaling $60.7 million to New Jersey small-business owners.
“Even during these tough economic times, TD Bank recognizes that small-business growth is a vital component of our economy,” SBA District Director Jim Kocsi said Tuesday, as he recognized leading SBA lenders during an annual award ceremony in Newark.

The recession and the credit crunch reduced SBA lending across New Jersey during the fiscal year — but SBA lending began to recover in the second half of the year, as $730 million in federal stimulus money was deployed to eliminate the SBA loan fees charged to borrowers, and to raise the federal guarantee to 90 percent from 75 percent.

An SBA loan is made by a bank or other lender, with repayment guaranteed by the federal government. In the last six months of the year, the number of New Jersey SBA loans rose 30 percent, and the dollar amount rose 14 percent. For the full fiscal year, SBA lending in New Jersey declined to 1,116 loans for $338.2 million, compared to fiscal 2008, when New Jersey businesses received 2,394 loans for $492.1 million.

Kocsi said those stimulus provisions could be phased out unless Congress decides to extend them, but said he doesn’t think phasing out the 90 percent guarantee and the fee suspension will severely impact SBA lending.

“With the economy recovering, we are seeing positive signals from our lending partners that things are starting to ease up, and they are getting more applications that they can approve,” he said.

BNB Bank, of Fort Lee, was the second-ranked New Jersey SBA lender, with 109 loans totaling $51.6 million. Vice President Dan Cardone is hoping Congress will extend the stimulus initiatives that have boosted SBA lending.

“The economy is not doing well enough, we still have a long way to go — but if these initiatives were extended, it would help a great deal,” he said.

Ira Lutsky is president of the New Jersey Business Finance Corp., in Fort Lee, which makes larger, 504 SBA loans that borrowers typically use to acquire real estate or equipment. He is seeing the economy turn upward, but also thinks the stimulus incentives need to stay in place to keep the recovery moving.

“People have the confidence now, and are starting to take advantage of the real estate market to acquire a larger facility,” he said. “The signs are pointing the right way, and the stimulus had a lot to do with it.”