New Jersey lenders made $602 million in government-backed Small Business Administration loans in the fiscal year ended Sept. 30 — the third-highest year on record — a strong showing that also marks the first full year without the incentives SBA has put in place to encourage lending during the financial crisis and recession.
"To do these kinds of numbers without incentives — I've got to say, I'm pretty happy," said Al Titone, SBA district director for New Jersey. Those incentives included waiving the loan origination fee and raising the amount of the loan the government could guarantee.
In fiscal 2012, New Jersey businesses received 1,172 SBA loans for $602 million. Fiscal 2011 was the state's second-best year, at $675 million; the New Jersey SBA lending record was set in 2005, at $699 million.
Bob Como, senior vice president of business banking for Chase, said SBA lending “complements the loan activity that we have seen in New Jersey, which has been very, very strong.”
Chase’s 143 SBA loans were the most in New Jersey last year, and were worth $15.6 million.
“This is a true commitment by business owners to continue their investment in their companies,” Como said. SBA loans typically finance equipment and real estate, so the rise in lending “is an indication that people feel comfortable about how their businesses are performing.”
TD Bank ranked second for the number of New Jersey SBA loans last year, recording 119 loans totaling $23.5 million. Nick Miceli, TD Bank market president for central New Jersey, said he sees more small-business optimism.
"Many have come through the worst of the recession, and are now thinking about growth," he said. "Especially in the health care practice and professional services sectors, we're seeing increased loan demand for purchasing inventory and business expansion."
Miceli said TD makes small business loans in its own portfolio and via the SBA, as well as through its partnership with the Economic Development Authority.
Phil Ferreira, vice president for commercial and SBA lending at Kearny Federal Savings, said both the economy and commercial lending picked up during 2012.
“The employment numbers were surprisingly better last month, and that had a positive effect on lending overall,” he said. Maria Palumbo, Kearny Federal’s SBA business development officer, said a number of firms are using SBA loans to buy facilities they had been renting: “We’re seeing the momentum pick up for owner-occupied real estate transactions.”
"We are seeing more confidence" on the part of small businesses, Titone said. "You can only sit on the sidelines so long, and you've got to make the commitment — and that is what we are seeing this year."
The 2012 results include a record 146 loans through the SBA's 504 program, for larger loans to finance major equipment and real estate purchases, totaling $148 million. In 2012, businesses could use a 504 loan to refinance an existing loan; that refinance provision expired Sept. 30. Titone said about a quarter of the 504 loans last year were refinancings; he is hoping Congress will extend this program.