Small-Business Credit Sees Thaw
Many small-business lenders are seeing signs of a thaw in the secondary market for loans backed by the Small Business Administration.
That is spurring more lenders to originate new loans — and more small companies to apply for them.
In February, the latest month for which figures are available, 35% of newly approved 7(a) loans, the most popular SBA loan program, sold on the secondary market, according to the Government Accounting Office.
That was up from 24% in January. From September 2007 to September 2008, before the credit crunch, 45% of approved 7(a) loans sold on the secondary market.
Movement was noticeable at GovGex.com, a secondary-market exchange where bundled SBA-backed loans are bought and sold.
The number of bids per loan for sale at GovGex.com has more than doubled to about 6.7 since mid-March, after President Barack Obama gave a speech about using $15 billion of federal funds to unfreeze the secondary market.
At Small Business Loan Exchange, an online marketplace where small businesses can find lenders, loan applications have more than tripled to 41 since mid-March, from the month before Mr. Obama’s speech, according to Edgeware Analytics Inc., the San Diego company that runs the site.
Photo by GovGex.com.
No comments yet.
Leave a Reply