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Biggest SBA Lenders Notch 14% Increase in OC

The pace of small-business lending in Orange County jumped over the past year, according to this week’s Business Journal lists based on information from the U.S. Small Business Administration.

The Business Journal compiled two lists featuring the largest SBA lenders here, one ranked by dollar volume of loans, the other by number of loans. The figures reflect financing activity for OC borrowers for the six months ended March 31.

The top 23 banks and other financial organizations combined for $152.6 million in lending, up about 14% year-over-year. That was spread across 265 separate loans, up about 8%.

Thirteen entries increased lending volumes, while eight had decreases. Two made no SBA loans in the year-earlier period.

• Wells Fargo Bank topped the list with $25.9 million provided to local borrowers, a 34% increase from the same period a year earlier.

“We are seeing a lot of our borrowers taking advantage of lower interest rates,” said Steven Doss, senior vice president and regional sales manager for the bank’s Southern California SBA group. “They’re doing debt refinancing and restructuring. That’s where we’re seeing a lift. In OC, specifically, demand for originations is still soft. Businesses are getting healthier, but the demand to go out and get new financing to buy equipment and expand business is still soft.”

• CDC Small Business Finance Corp. slipped one spot to No. 2, with a 40% decrease in its lending total to $15.1 million. The San Diego-based organization has an office in Anaheim with seven employees, including three loan officers.

CDC partners with third-party private lenders and specializes in the 504 loan program, which is used primarily for purchases of fixed assets, such as equipment or real estate, and for construction.

“There has been some level of reduction to the 504 loan program … partly due to a lack of real estate products,” said CDC Chief Credit Officer Michael Owen. “We’re still making a decent amount of loans each month. … There is still demand for SBA loans, because it does open up more opportunities for businesses to obtain financing. SBA loans allow you to extend credit terms that you couldn’t arrange conventionally. By ‘extending those terms,’ I mean lower cost of interest or longer terms of repayment, as well as flexibility with the collateralization.”

• Irvine-based Plaza Bank jumped 10 spots to No. 4 with a 114% increase in lending to $10.6 million. It’s the largest SBA lender headquartered in Orange County.

“We’ve built a system that adapts to the economic environment quickly,” said Senior Vice President Todd Massas. “The SBA 7A loan program affords Plaza Bank the opportunity to tackle some lending opportunities that would potentially otherwise have gone unfulfilled.”

Plaza Bank Executive Vice President Erich Bollinger said the overall SBA lending market is improving and competitive.

“The implications are positive,” he said. “More capital in the hands of small businesses across our country means more jobs created and retained, which remains the primary focus of these lending programs.”

Nearly half of the entries—11—are new to the list, several notching three- or four-digit increases in lending, mostly from smaller base amounts a year earlier.

• The newcomers include No. 8, Pasadena-based East West Bank, which has an office in Irvine and mainly serves the Chinese-American population. It made $7.5 million in SBA loans to OC borrowers in the six-month period versus $1.2 million a year earlier.

• No. 12, San Jose-based Bridge Bank, which has an office in Newport Beach, provided $3.9 million in four loans versus one loan in the year-earlier period that was worth $150,000. Bridge overall specializes in technology banking, but its SBA lending in Southern California has no sector-specific focus, said Steven Chaker, sales manager. The bank is part of Carpenter Community BancFund, an Irvine-based private equity firm that specializes in banks and bank holding companies.

• SBA lending in OC by No. 15, Pacific City Bank, jumped nearly 800% to $3.4 million. The bank, which is headquartered in Los Angeles, has offices in Fullerton and Buena Park and primarily serves Korean-American customers.

• Costa Mesa-based Commercial Bank of California debuted on the list at No. 19 with $3.3 million in SBA lending, more than 15 times the year-earlier total of $215,000.

Chief Executive Ash Patel said the bank has increased focus on its SBA division, including by hiring three employees to double the team and adding technology resources.

It has also “undergone some additional training and brought in some new technology to help us better price our loans and evaluate risk,” Patel said.

The Business Journal added a list this year highlighting the largest lenders based on the number of loans. It features 33 banks and financial institutions that combined for 319 loans between Oct. 1 and March 31. That’s up about 11% from the year-earlier period.

Eight entries made fewer loans year-over-year, while 17 made more. Three made no SBA loans in the previous period. Five remained flat.

The majority of the lenders made fewer than 10 loans, and the top three companies accounted for more than 40% of the total.

• No. 1, U.S. Bank, made 56 loans, up 87% year-over-year. The amount of loans increased by a similar margin, to $12.9 million.

• Wells Fargo followed with 48 loans, up about 12% year-over-year; and No. 23, JPMorgan Chase & Co., made 28 loans, down from 34 a year earlier.

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