In another sign of a recovering economy, larger loans to new small businesses are on the rise.
AcciónTexas, Inc. has announced its best fourth quarter to date for Small Business Administration 504 lending. The nonprofit small business lender this week announced its SBA 504 lending division had a record fourth quarter of $12.9 million in loans, a figure 77 percent higher than the previous year.
Bob Schraitle, vice-president of the 504 division, credits several factors, including pulling out of the recession, for the marked increase in new loans.
“The overall economy is beginning to show strength everywhere," Schraitle said. "Real estate prices are coming back even in some of the places like Florida and California. Now that the economy is coming back, a lot of those same places where they took the biggest hits in real estate prices are not becoming some of the strongest markets."
Schraitle said the 504 loans are specifically for commercial real estate and large ticket assets for business such as heavy machinery or equipment. Banks partner with the SBA to lend 50 percent of the funds, with the SBA offering 40 percent and the borrower contributing 10 percent.
SBA 504 loans are designed to offer new businesses and others without strong credit footing the chance to get started in a market where banks have increasingly become tentative about lending.
