Small business loans in the county jumped to $80.7 million in the first quarter, a 172% rise from a year ago, according to the Small Business Administration’s Santa Ana district staff.
“I’ve been at the SBA since 1988 and I’ve never seen a leap this big,” said Rachel Baranick, acting district SBA director for Orange, Riverside and San Bernardino offices. “I think we’re definitely well into a recovery.”
Economists welcomed the surge, pointing to nearly two years of shrinking loans available to local business owners.
“The bulk of new hiring in Orange County comes from small and midsize employers,” said Wallace Walrod, vice president of research at the Orange County Business Council. “If they’re becoming more confident in the economic outlook within their own individual businesses, that’s a very welcome sign.”
David Haithcock agreed. The executive director of the California Independent Bankers Association, a trade group representing 160 community banks across the state, pointed out that local small business lending activity historically has recovered quicker than most other counties.
“We’ve heard from several bankers in the county that small business (lending) activity is the strongest they’ve seen in nearly two years,” Haithcock said.
Another signal that lending might’ve reached an inflection point is that some of the hardest hit sectors during nearly 18-months of the recent economic slowdown are showing activity, he said.
In particular, such early activity is causing many bankers in the county to be “cautiously optimistic” about opportunities going forward in areas such as construction and real estate, according to Haithcock.
“We’re starting to hear lenders are starting to see some movement in those sectors,” he said. “Up to this point, construction and real estate lending has been very, very slow. If small businesses are starting to consider expanding their outlays in those areas, that’s a very encouraging sign.”
