Top Lenders Grow Volume 47%; US Bank No. 1
Small Business Administration lending in the county grew 47% for the 12 months ended Sept. 30 among the top 20 SBA lenders on this year’s Business Journal list. The total of the SBA loans given out almost reached $200 million, up from $135 million last year.
The increase in total loan value is due in large part to a 39% increase in loans issued by the lenders on the list to Orange County companies, 470 loans in all. The loans also increased in average size, from $400,304 last year to $423,457 on the new list.
The larger loans have been a result of more commercial property acquisitions by the small business owners, said lenders.
“There are a lot of small businesses that are buying real estate,” said Doug Rozsa, a senior vice president and regional manager of SBA for Wells Fargo. That, coupled with higher land values, has upped the amount of money being lent.
To help the smaller businesses get bigger, the SBA is working on increasing the limit on he loans that it guarantees from $750,000 to $1 million, though it does not know when the changes will take effect.
No. 1 on this year’s list is US Bank, which entered the Southern California market with force in the past two years after its acquisitions of Western Bancorp, Southern California Bank, and banks in San Diego. In Orange County, US Bank’s SBA lending operations grew 41% to $33.5 million, moving it from No. 10 last year when it had $23.8 million in SBA loans.
“It (SBA) is a very good financing program. That couples with the growth of the economy and the growth in small business,” said Robert R. Flores Jr., the senior vice president/SBA Western regional sales manager for US Bank. Flores said the growth in SBA loans is due to the personnel the bank added with the acquisitions.
“We have been fortunate. We have some seasoned business development officers,” Flores said.
No. 2 on the list is Wells Fargo, which had 46% growth in its SBA loans from $16.4 million to $24.0 million.
“We have just made a renewed focus on SBA and small business. There is a market we haven’t reached,” Rozsa said. The bank increased its SBA loans to 96, from 62 last year.
“We’ve put more resources there as well,” Rozsa said. Rozsa said the bank added a few people to work only on SBA lending. Previously, the commercial loan department handled the SBA loans.
CNL Commercial Finance Inc. ranked No. 3 on the list this year. The company had 10% growth in loans, but lost its No.1 ranking from last year, being outpaced by US Bank and Wells Fargo. The company’s loan volume grew almost $2 million, though the number of loans stayed the same at 35.
Imperial Bank jumped four spots on the list this year to No.4. The Los Angeles-based bank grew its SBA production by 132% from $6.4 million to $15.0 million.
But No.5 Business Community Capital had the most growth of any lender on the list. After starting up last October, the company made 28 loans worth $13.7 million.
Business Community Capital is a new division of Fullerton Community Bank that the bank formed after it had an opportunity to pick up several SBA lending employees. After Orange National Bank was acquired by Citizen’s Business Bank last year, many of the Orange National SBA employees did not want to make the move to the new bank and chose to find a new home. A large portion of Orange National’s employees went to Fullerton Community Bank.
Last year, Citizen’s Business Bank was No. 7 on the Business Journal’s list with 24 loans worth $9.7 million. But this year, it only made one SBA loan worth $62,400 and did not make the list. Bank officials said the drop-off was due to a switch in focus from 7a loans to 504 loans. The Business Journal list does not include 504 loans in its ranking. But according to a source within the bank, Citizen’s lost about ten people in the exodus, leaving it with less than eight SBA employees.
Bank of the West/Stultz Financial Inc. rolled in at No. 11 this year, after growing its SBA production in Orange County by 274% from $1.8 million last year to $6.8 million this year.
“The thing driving the SBA lending business is the underlying economy being so strong,” said Jim Ely, a loan representative with Bank of the West. The bank only made six more loans this year over last, but because of larger loans for real estate transactions, the bank’s dollar total of loans has increased.
“It’s because of an increase in average size because of the demand for commercial and industrial real estate,” Ely said. He said SBA lending in Orange County has been active, especially in South County and the Irvine Spectrum areas.
Another big gainer in the Orange County SBA market was Covina-based Community Bank, which grew its SBA activity in OC by 629%. Last year, it made eight loans worth $865,000. It bumped up its loans to 36 worth $6.3 million.
There are eight SBA lenders new to the list this year and seven that were bumped off. The lenders off the list include, Bank of America Community Development Bank, Citizen’s Business Bank, City National Bank, NARA Bank National Association, World Trade Financial, Los Angeles National Bank and First Security Bank-California. n
