Al Titone, SBA New Jersey district director, said banks have tightened credit in recent years, and "that is one of the reasons we are doing so well. We give the lender a little more security," because the loan has a 75 percent or 85 percent federal repayment guarantee.

With that SBA backing, "banks feel better about doing certain loans. We are there for that narrow niche of folks with borderline credit that a bank might normally turn down. The SBA guarantee lets them do a loan they might normally not do."

Most small-business lending is done by banks for their own portfolios, outside the SBA. Bank of America, the largest bank operating in New Jersey, said its small-business lending across the state rose 28 percent last year, to $364.7 million. – Beth Fitzgerald