SBA Loans for NYC Businesses
The U.S. Small Business Administration said it reached the $18.75 billion cap for its main loan guarantee program on Thursday, forcing it to halt the funding of new loans with more than two months left in the fiscal year.
SBA spokesman Miguel Ayala said the capacity for fiscal 2015 was exceeded by stronger-than-anticipated demand for the government-guaranteed 7(a) program loans made by banks to small businesses.
As the agency neared the cap, lenders submitted a crush of $3 billion in loan applications already in July, including $1.7 billion this week alone. The July figure is more than five times the agency’s recent monthly volume, Ayala said.
The strong demand, which has been building all year, is a sign of an improved economy in which small firms want to expand and need capital, particularly in poorer communities, Ayala said.
The agency’s loan guarantee capacity would normally be reset under a new cap at the Oct. 1 start to the next fiscal year but a two-month halt in lending could slow job growth in the sector of the economy that creates the most net new jobs.