The Small Business Administration (SBA) has reported a 12% increase in the number of 7(a) loans approved in the fiscal year 2023, which ends on September 30. The 7(a) program is the SBA’s flagship loan program that provides financing for small businesses to start, expand, or acquire other businesses. The SBA guarantees up to 85% of the loan amount, reducing the risk for lenders and making it easier for small businesses to access capital.
Bank of America Aims for $1 Billion in 7(a) Loans
One of the biggest beneficiaries of the SBA loan growth is Bank of America, which has made 1,000 loans totaling $394.2 million through the 7(a) program so far in fiscal 2023. This is a significant increase from the previous fiscal year, when the bank made 505 loans for $201.1 million. Bank of America’s national SBA executive, Steve Turner, said that the bank is aiming to increase its 7(a) loan volume to $1 billion for the next fiscal year, which starts on October 1.
Turner attributed the bank’s success in the SBA market to its focus on customer service, technology, and efficiency. He said that the bank has streamlined its application process, improved its online portal, and trained its staff to better serve small business clients. He also said that the bank has expanded its SBA lending team and increased its outreach to underserved markets, such as women-owned, minority-owned, and veteran-owned businesses.
TD Bank Ranks as the Top SBA Lender in New England
Another big bank that has capitalized on the SBA loan growth is TD Bank, which ranks as the top SBA lender in New England for fiscal 2023. The bank has approved 1,441 loans totaling $194.6 million in the region, representing a 28% increase in loan volume and a 19% increase in loan count from fiscal 2022. TD Bank’s head of SBA lending, Mike Rittler, said that the bank has seen strong demand for SBA loans across various industries, such as health care, hospitality, manufacturing, and retail.
Rittler said that TD Bank’s competitive edge in the SBA market comes from its speed, convenience, and expertise. He said that the bank can approve SBA loans within hours or days, compared to weeks or months for other lenders. He also said that the bank offers a variety of SBA loan products, such as express loans, term loans, lines of credit, and real estate loans. He added that the bank has a dedicated team of SBA specialists who can provide guidance and support to small business owners throughout the loan process.
Other Big Banks Also Increase Their SBA Loan Presence
Besides Bank of America and TD Bank, other big banks have also increased their presence in the SBA loan market. For instance, JPMorgan Chase has approved 4,021 loans totaling $513.9 million in fiscal 2023, up from 3,312 loans for $425.7 million in fiscal 2022. Wells Fargo has approved 2,718 loans totaling $1.2 billion in fiscal 2023, up from 2,379 loans for $1 billion in fiscal 2022. Citigroup has approved 1,074 loans totaling $181.5 million in fiscal 2023, up from 843 loans for $142.9 million in fiscal 2022.
The big banks’ increased participation in the SBA loan market reflects their commitment to support small businesses amid the economic slowdown caused by the Federal Reserve’s interest rate hikes and the coronavirus pandemic. The SBA loans provide small businesses with low-cost and flexible financing options that can help them overcome cash flow challenges, invest in growth opportunities, and create jobs.
