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More small businesses in Massachusetts were able to get loans backed by the U.S. Small Business Administration for 2023.
Robert H. Nelson, director for the SBA’s Massachusetts district office, said that for their full fiscal year ending in September, the number of small businesses that were granted 7(a) and 504 loans backed by the agency increased by 11 percent from last year.
In dollar amounts, a total of $614.6 million worth of 7(a) and 504 loans were made, a 7.5 percent improvement from $571.6 million from the previous year.
The SBA’s 7(a) and 504 loan programs offer up to $5 million and $5.5 million per loan, respectively. The former support any special requirements of small businesses while the latter loans help with capital for fixed assets. The SBA backs these loans for up to 80 percent of the whole loan in case the borrower is unable to make payments.
The increase was mostly led by approvals for 7(a) loans as it increased 27.5 percent to 1,434 loan approvals from 1,125 a year ago. Approvals for 504 loans went down by 39.9 percent to 203 approvals from 338.
Nelson pointed out that a bright spot for 504 loans occurred in Western Massachusetts where loan approvals increased to 36, from 21 the prior year.
Microloan approvals also jumped by 65.9 percent to 141 loans from 85 last year. Microloans are smaller loan amounts for small businesses of only up to $50,000.
“Together, including 7(a), 504 and microloans – the SBA with 165 lending partners, supported capital to 1,775 small businesses for over $855 million in Massachusetts,” Nelson said in a statement. “Our commitment to Main Street alongside our lending and resource partners continues to remain firm in support of a resilient economy. This fiscal year, even with interest rates rising, our ability to support the underserved became one of our strengths. Thanks to our tireless partners, we continue working towards building an equitable entrepreneurship ecosystem.”
The SBA said Eastern Bank remains the top SBA lender for 7(a) loans in Massachusetts for 15 years in a row, producing a total of 230 7(a) loans, amounting to $41.6 million.
Bay Colony Development Corp. was SBA’s highest producer of 504 loans in the state with 72 loans totaling to $58.1 million, while Common Capital was the top microlender by volume, approving 28 loans.
