It appears that reporting of SBA loan statistics has slowed a bit recently, likely due to efforts to facilitate the PPP program.
Despite the distractions caused by the COVID-19 crisis, SBA 504 loan origination growth continued to progress at an accelerated pace in April. Through April 17, 2020, SBA 504 loan originations were up 34.5% compared to the prior year, reaching $3.33 billion year-to-date in FY2020 versus $2.48 billion during the same period in FY2019. The unpaid principal balance of outstanding 504 loans stood at $25.83 billion as of December 31, 2019, up 0.2% compared to the $25.77 billion figure at year-end FY2019. In contrast, SBA 7(a) loan originations are down 13.6% year-to-date (through April 17) to $10.66 billion and the unpaid principal balance of 7(a) loans was $95.37 billion at December 31, 2019, up 3.0% compared to year-end FY2019.
While 7(a) loan outstandings continue to grow at solid pace (2.9% in FY2019 and 7.2% in FY2018), 504 loans have remained in a fairly tight range between $25 billion and $27 billion over the last nine years. Of course, the published 504 loan figures in the chart above includes only the CDC/SBA second lien portion of a 504 loan package, which typically amounts to roughly 40% of the financing. If the first lien loan and borrower investment were included, the 504 loan totals would be closer to 7(a) loan totals.
The strong growth in loan originations in the 504 program almost seven months into FY2020 has been broadly distributed among a variety of groupings. In percentage terms, the growth has been greatest for American Indian borrowers, which recorded a 134.4% year-over-year increase through April 17, 2020. Asian or Pacific Islander, Black, and Hispanic borrowers also grew at rates between 29.5% and 35.8% so far this year.
News Blurb of the Week – Agencies urged to pause CRA reform as banks manage pandemic response, Brendan Pedersen, American Banker
May 7, 2020 – Regulators should slow efforts to modernize the Community Reinvestment Act as the coronavirus pandemic dominates the workload of bankers and the agencies, a cohort of stakeholders said this week.
