SBA Hot Topic Tuesday – SBA FY23 7(a) Loan Approvals Up 130%
“People are certainly unsure of what’s going to happen,” says John Reosti of American Banker during the Coleman Report Live! show. “People are expecting some type of recession in 2023. It seems like conventional lenders are tightening their underwriting standards, and that means SBA is definitely more in play now than it was last year and prior. If things continue at this pace it’s going to be a blow-out year.”
Demand is shifting back to the 7(a) program going into fiscal year 2023 after slowing down since the pandemic. As of November 18, the SBA approved more than $3.6 billion and almost 7,000 loans in the SBA 7(a) program, and compared to the same time last year, the approved dollar amount more than doubled. So far, fiscal year 2023 has the highest approved dollar amount in comparison to the last five years.
After multiple years of historical growth and record-breaking numbers for the 504 program, the demand now dropped 53% early on in fiscal year 2023. The SBA’s data from November 18 shows that $810 million and 748 loans have been approved under the 504 loan program. Despite the drop from fiscal year 2022, the 504 approved dollar amount is still higher than the years prior to fiscal year 2022.
“We had outstanding rates for all of fiscal year 2022. The rates have crept up,” says Lance Sexton about the 504 loan program numbers during the Coleman Report Live! show. “Some people may be looking at 504 and saying ‘Hey, I’m going to do it next year because I think rates are going to drop off some next year’. We’ve watched rates rise faster than they have at any time in my career during a twelve-month period and the 504 rates have risen as well.
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About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the Federal Government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.