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National SBA 504 Day — Why is SBA 504 Lending Dropping Faster than Snapchat Stock?

May 4, 2018

By Bob Coleman
Editor, Coleman Report

National SBA 504 Day — Why is SBA 504 Lending Dropping Faster than Snapchat Stock?

The numbers are brutal. SBA 504 lending is down 30% in 2018.

Compare the first four months of 2017 to 2018.

30% Down by Dollar Amount
23% Down by Loan Number

Jan-April 2018
1,736 loans approved
$1.372 billion

Jan-April 2017
2,127 loans approved
$1.780 billion

The SBA 504 lending program is on pace to fund $4.2 billion for FY 2018. That will match 2014 numbers — and well down from a peak of $6.7 billion in FY 2012.

In January I conducted a survey of the industry.

41% of you said SBA regulations were making the program unmanageable. 60% said the credit elsewhere test was a “severe” detriment to the program.

Now, the April 3 recent change to eliminate a “personal resource test” of owners of less than 20% may help.

Please, give me your updated feedback in this quick poll.

I’ll publish the results next week.

My employer is a
CDC
SBA 7(a) Lender
SBA
Other

What is your opinion of the SBA 504 lending program?
Working as intended
Needs tweaks, but it is fine
It’s ok, but difficult at times
SBA regulations are making it unmanageable

The credit elsewhere provision in the new SOP for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

The changes in equity injection in the new SOP for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

The Debt Refinance provision in the SOP for SBA 504 lending is:
A severe detriment
A challenge we’ll work through
OK
No opinion

Open-ended Question — What changes would you like to see in the SBA 504 loan program?

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