SCORE Small Business Blog

Finance: New Loan Limits for SBA

Learn How New Rules Will Affect Your Loan Chances

I was at a business function last night in Atlanta and had the opportunity to speak to two SBA lenders from “mega banks.” They both were “pitching” the new increased loan limits to 7a guaranteed loans that have been raised to $5mm and 90% guarantees. They were excited about the new opportunity and were aggressively seeking potential borrowers.

I asked what their average loan amount was for SBA loans, the traditional loan is 7a, and they both stated their averages exceeded $750k per loan. In Georgia last year, the SBA posted their approved loan data and participating banks had a loan average above $450k.

My experience has been that most small businesses need loans in the 50 to 150k range and that most participating lenders won’t consider these loan amounts, even for qualified borrowers, because it doesn’t generate sufficient enough fee income to support their loan origination and processing expenses.

What’s been your experience?

Steve BloomChapter Chair & Business Mentor, SCORE Atlanta
Steve Bloom started several business ventures in mortgage banking, real estate development and management, importing and business consulting. He has invested in several startups and has been retained by owners to assist in “turning around” businesses. | @stevebloom | More from Steve

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