The U.S. Small Business Administration’s Houston district saw a nearly 25 percent increase this year in the dollar amount of the most popular type of SBA loan compared with the pre-pandemic year of 2019.
A new report from the SBA shows small businesses in the 32-county district received $1.3 billion in 7(a) loans in fiscal 2021 compared with almost $1.05 billion in pre-pandemic 2019. Borrowers in the SBA-backed 7(a) program can obtain loans of up to $2 million. The length of each loan is 25 years for real estate deals and seven years for working capital.
“The SBA continues to make headway in helping small businesses access much-needed capital, but much more work remains to be done,” Patrick Kelley, associate administrator for the SBA’s Office of Capital Access, says in a news release.
In terms of the number of 7(a) loans extended in the Houston district, the top lenders for fiscal 2021 were:
- Wallis-based Wallis Bank
- San Francisco-based Wells Fargo
- Columbus, Ohio-based United Midwest Savings Bank
- Birmingham, Alabama-based BBVA USA (now part of Pittsburgh-based PNC Bank)
- Wilmington, North Carolina-based Live Oak Bank, the country’s most active 7(a) lender.
The top 7(a) lenders by total dollar amount of loans were:
- Wallis Bank
- Live Oak Bank
- Humble-based Plains State Bank
- San Antonio-based Frost Bank
- Kingswood-based The Mint National Bank
The SBA’s Houston district is home to more than 600,000 small businesses in a 32-county region that includes the nine counties in the Houston metro area: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller.
Nationwide, the SBA backed $36.5 billion in 7(a) loans in fiscal 2021. Nearly $11 billion went to minority-owned businesses, $5 billion to woman-owned businesses, and $1.2 billion to veteran-owned businesses.
SBA lending could experience an uptick in fiscal 2021 due to inflation. An October 2021 survey conducted for the U.S. Chamber of Commerce and MetLife found 45 percent of small businesses had taken out loans to cope with rising inflation; among retailers, that figure was 58 percent. In the survey, 74 percent of small business owners expressed concern about inflation.
“Small business owners’ optimism is plowing through economic uncertainty, but they now face new obstacles with rising inflation, labor shortages, and supply chain challenges,” Tom Sullivan, vice president for small business policy at the U.S. Chamber of Commerce, says in a news release.