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SBA Lending Dollars Grow 34%; Rankings Expand

The Business Journal’s lists of Small Business Administration lenders are in upheaval this year.

Not one of the 38 on our dollar value list retained its spot from a year ago. Fourteen reported growth topping 100% and 22 new lenders joined the list (see page 25).

Lending to small businesses is back, with a 34% jump on this list to nearly $215 million in the most recent two quarters, compared to 13% growth last year.

Meanwhile, just five of 47 lenders on our second list (see page 21), ranking them by number of loans made in the period, kept their same spot; the number of total loans hiked a healthy 14% to 383; and the average loan was smaller: $552,000 compared with $561,000 a year ago. Seven lenders joined the list.

Both lists are based on data from the U.S. Small Business Administration and include only lending to OC borrowers, regardless of the lender’s headquarters or branch locations. Lenders on both lists include banks, community development institutions and nonprofits that provide SBA loans.

Little Guys

Banks often consider SBA loans an important entry into the front door of small companies that may grow; more than two dozen of the lenders on our lists are banks.

The lists comprise different lenders and offer two angles on OC’s small business community: which lenders are doling out the most, and which are lending most often.

The lists include two types of loans: the 7(a) program, which permits business acquisitions, equipment purchases and debt refinance; and 504 loans used for owner-occupied commercial real estate purchases and refinancing, along with larger equipment purchases.

The latter loan allows as little as 10% down, versus a typical 20% to 25% of conventional banking products.

Big Moves

A year of change had some notable highlights:

• U.S. Bank’s SBA Division jumped from No. 19 to No. 2 on the dollar value list, doubling its loan total to $11.9 million and taking the top spot on the second list with 39 loans made, up one-third over last year’s number.

“We’ve been hiring sales people and those people are successful,” said Catherine Jooyan, who leads the bank’s SBA division for the region. Loans are focused on acquisitions and real estate but no industry is dominant.

“The economy is still going strong,” she said.

• Irvine’s Sunwest Bank debuted at No. 11 on the dollar volume list, the highest ranking for a newcomer, with a 541% increase to $7.2 million for the six months ended March 31. The loans were big: it made three in the period.

Last year, it hired T.J. Chavez, previously at Union Bank. He’s built his SBA team from two to 12 employees, many of whom have been among the top 100 SBA lenders in the country.

“We’ve hit the ground running,” Chavez said. A capitalized line of credit is growing in popularity with loans up to $5 million possible, he said.

• A year ago, CDC Small Business Finance in Irvine reported a 50% decline in loan value to $9.1 million due to fewer buildings for sale that it could lend on. CDC then partnered with Wells Fargo to offer a new SBA product—the first-ever 25-year loan, along with those on traditional 10- and 20-year terms.

CDC this year jumped from No. 8 to the top spot on the dollar value list, boosting volume 40% to $12.7 million; it went up a notch to No. 4 on the number of loans list with 22.

• No. 5 Wells Fargo Bank, which led the dollar value list for five years until losing the position last year when loans dropped 74%, stopped its hemorrhaging somewhat: loan value fell only 18% to $10.3 million. Steve Doss, who led its SBA regional effort for 14 years, left in October for Union Bank’s San Diego digs, where he’s building a national team.

• No. 13 Umpqua Bank said loans climbed 234% to $6.4 million on seven transactions and No. 38 New Omni Bank had the biggest percentage jump: 1,620% to $2.6 million on two loans.

• Pacific Premier Bancorp, the largest bank by assets based in OC, fell to No. 36, down 70% to $2.7 million on 11 loans, after jumping 26-fold to $9 million on last year’s list.

Other big declines: No. 25 U.S. Metro Bank, down 66% to $3.8 million on six loans; No. 18 Southland Economic Development Corp, down 51% to $4.3 million on five loans; and No. 10 JP Morgan Chase & Co., down 45% to $7.9 million on 28 loans.

San Francisco-based Bank of the West last year leapt nine places to first after doubling lending to $16 million. This year it reported a 41% decrease to $9.5 million on 19 loans, No. 6 on both lists.

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.
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