Walter Perry III, district director for the U.S. Small Business AdministrationChattanooga lenders have nearly tripled the number of Small Business Administration loans made this year compared with a year ago as the economy has improved and interest rates have remained near historic lows.
"I think what you're seeing is the uptick in the economy and borrowers are looking for loans to either start or expand their businesses," Walter Perry, the SBA director in Tennessee, told local bankers during a luncheon Tuesday sponsored by the Chattanooga State Small Business Development Center. "Banks also have money that they are eager to lend to support small business growth."
In the first seven months of the current fiscal year, 43 SBA loans were made in Hamilton County for a total of $27.6 million. In the same period a year ago, only 16 loans were made for a total of $8.4 million.
Statewide, SBA loan volume has nearly doubled from 208 loans worth $107 million last year to 340 loans totaling $199 million this year.
Despite the gains, Perry urged local bankers to consider even more SBA loans, noting that some of Tennessee's biggest SBA lenders were out-of-town banks like Celtic Bank from Salt Lake City, Live Oak Bank from Wilmington, N.C., and First Financial Bank from El Dorado, Ark.
"There's money on the table for you," Perry told the Chattanooga bankers.
In most SBA programs, the government guarantees repayment of a portion of the bank loan and currently the SBA has extended a fee waiver that saves most borrowers $2,500 per loan.
SBA loans are made by about 100 banks, credit unions and certified development companies that are designated as SBA lenders in Tennessee.
Chattanooga was home last year to both the top community-based bank and the top certified development company for SBA loans. Perry presented awards Tuesday to FSG Bank for being Tennessee's biggest community bank lender with 14 SBA loans in 2014 and recognized BrightBridge Inc. as the top nonprofit SBA lender with 10 loans last year.
The biggest dollar volume lender for SBA in Tennessee during 2014 was Regions Bank, which is the third biggest bank in Chattanooga and made $15.9 million of SBA loans in the Volunteer State last year.
Billy Bowers, senior vice president at FSG Bank, said FSG is eager to double its SBA lending over the next year even as it plans to merge with Atlantic Capital Bancshares Inc. in Atlanta.
"We had a meeting just today in which we talked about our goal of taking SBA lending to a whole other level," Bowers said Tuesday. "We think it's a great way for us to help small businesses, help our community and help build our loan portfolio. It's a big initiative for us."
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.