Last year, in the county, the total SBA 7(a) first-quarter loan volume for Wells Fargo’s 19 banks was $166,000, representing just two loans.
This fiscal year’s first quarter, the bank made 14 loans, totaling $8.4 million.
By way of comparison, during the entire 2010 fiscal year, the total dollar amount of SBA loans made by all the banks in the county was $8.8 million and 21 loans.
The fourth quarter of the calendar year, which is the SBA’s fiscal first quarter, is typically a strong quarter, said Steve Helbing, Wells Fargo’s market president for Colorado Springs.
Helbing said the numbers were so high largely because the SBA had a special promotion, waiving the SBA loan fee, which ended Dec. 31.
“We think that probably pushed some business into that quarter because it represented good savings for the borrower,” he said.
So far in the current quarter, Wells Fargo has seen a continued strong interest in loan applications.
Based on last quarter and the number of loans in process, Helbing said that this fiscal SBA year is on track to be up from last year by a double digit percentage.
Although the SBA special has ended, he attributes the continued loan demand to business owners’ concern about interest rates going up.
“They feel like locking a rate in today is a smart decision, especially if they’re locking it in for 10 to 20 years,” he said.
Another driver of loan applications is a shift in the psyche of consumers and business owners.
“A lot of sellers of businesses or buildings have capitulated,” Helbing said. “They are marking whatever they’re selling to a realistic price for the environment of the new normal.”
Wells Fargo’s success accentuates the sharp turn from a year ago that other banks are reporting, too.
During this first SBA quarter, all banks in the county have made 53 loans, totaling $27.4 million.
The SBA launched a pilot loan program this month in hopes of increasing access to inventory financing for boat, RV and automobile dealerships. The program will run through Sept. 30, 2013.
The Small Business Jobs Act of 2010 included a provision for this re-release, as it were, of the SBA’s Dealer Floor Plan Pilot Loan program, which first became available in July 2009, and is part of its 7(a) loan program.
In addition, the jobs act also increased the maximum amount for 7(a) loans from $2 million to $5 million, including for this pilot program.
The floor-plan financing works as a revolving line of credit, allowing dealerships to obtain financing for inventory that requires a title, such as RVs, manufactured homes, boats, trailers and automobiles. Each time a car, or another piece of collateral, is sold by the dealer, the loan advance against that piece of collateral is repaid. As the loan is paid down, the dealer can borrow against the line of credit to add new inventory.
To view rules and regulations for the pilot, visit the SBA’s website, at http://www.sba.gov/content/dealer-floor-plan-financing-program-0
Security Service Federal Credit Union has reached $6 billion in assets and more than 800,000 in members. Headquartered in San Antonio, the credit union has five offices in Colorado Springs, three in Pueblo and about a dozen in Denver and northern Colorado.
Established in 1956, Security Service is the eighth largest credit union in the United States.
Last year, SSFCU acquired Norbel Credit Union in northern Colorado and Beehive Credit Union in Utah. Security Service has acquired or merged with 20 credit unions in Colorado, Texas and Utah.
Rebecca Tonn can be reached at firstname.lastname@example.org or 719-329-5229.