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Good News/Bad News for Small Business Lending in 2013…
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Good News / Bad News about Small Business Lending in 2013...

The last two years have seen record-shattering levels of government-guaranteed lending, which includes the SBA 504 loan program (aka the SmartChoice® Commercial Loan). In terms of loan volume, 2011 and 2012 were the biggest and second biggest years (respectively) in the history of the SBA. Since the SBA has done the lion’s share of small business lending as our economy struggles to get back on its feet, what can we expect in 2013?

GOOD NEWS — SBA loan volume is up 18 percent over the same period last year (again, the second biggest year for SBA lending ever). It’s clear that demand from small business owners for these loans remains strong, and SBA lenders like Mercantile Capital Corporation are filling the void left by ordinary banks and other lenders.

BAD NEWS —Don’t expect this record-setting trend to continue through 2013. All-told, we think we’ll see 504 loan volume drop 25–30 percent by the end of this fiscal year. One of the primary reasons for this is the expiration of the 504 refinance program last September…one of the biggest blunders made by our elected officials in recent history (in my opinion).

This program was a public-private partnership, NOT a government subsidized program, and it helped many small business owners lower their commercial property expenses and create wealth for themselves without requiring any taxpayer dollars to do so. Out of the $15 billion authorized for the program, a mere $2.5 billion was put to use (much of it in the waning days early last fall). There has been some talk of reinstating the program, but we don’t hold much hope that we’ll see it happen.

Despite this, we believe that Mercantile and other smart lenders will be able to help many small business owners get the commercial property financing they need, and 2013 will be a good year. Just don’t look for the record numbers we’ve seen in recent years.

What do you think? Leave a comment below or email us at to tell us how you see things shaping up for the small business lending industry or your business this year. And please share this with someone else who’ll find it interesting.

Thanks for reading, commenting, and sharing!

– Your 504 Experts

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  1. Linda Dattilo says:

    Hi Chris! Congrats on your book and a many successes!
    Well, we just need changes, but, change is always had to adjust to.
    I really want to get into Commercial Lending, but, I can’t seem to make much headway..Do you know where I can get some good training for commercial lending?
    Thanks, and keep up the good work!

  2. Jim Schnorf says:

    Thanks Chris, had not seen this blog.

  3. Jim Wilkie says:

    Here’s hoping our friends in Washington DC wake-up and get the re-fi opotion back on the table. In the meantime, for those refinance situations up to $5mm, I can still get them done under the 7a program. And make it worht your while.

  4. Frederick Whitlock says:

    Thanks so much Chris. Your comments and insights are always helpful and productive.

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