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SBA business loans are back in business in Central Oregon

SBA Loansby Peter May, MBA, CCIM

If you have been thinking of expanding a business, buying a business or looking to make improvements for a business in Central Oregon, you may already be aware of how challenging it has been to obtain an SBA business loan over the course of the past  four years. The type of loan sought is typically an SBA 7(a) loan,  used for debt consolidation, business expansion, buying out a partner or purchasing a business.

SBA business loans allow business owners to obtain loans that may not be available using conventional funding. In addition, an SBA loan can provide funding with as little as 10% down payment for owner/user real estate purchases. All of that said, I’m happy to hear of a few examples of SBA loans being written again here in Central Oregon. In fact, Wendy McGrane’s team at Columbia State Bank completed two SBA 7(a) loans in the past few months. The number may seem insignificant, but it signals an improvement in the availability of funding.

Another type of loan that seems to be alive and improving is the SBA 504 loan typically used for real estate and large equipment purchases. Evergreen Business Capital, one of the companies that provides the funding to banks for SBA loans, notes that overall SBA 504 lending has seen a 41% increase in dollar volume of loans and a 10% increase in the number of loans given in Oregon and SW Washington over the last year (compared to the previous 12 month period).  Total loans from the SBA in Oregon amount to over $92 million for the fiscal year 2012.

Evergreen also provides funding for specialty businesses and has reported several recent loans to members of the brewing industry for expansion and equipment — particularly helpful to the thriving brewing industry in Central Oregon.

I find this recent increase in the amount and variety of lending to be an encouraging sign of positive changes happening in the banking industry.  Any increase in funding is a catalyst to spur growth in Central Oregon.

Peter May, MBA, CCIM  is a business and real estate broker with Compass Commercial Real Estate Services in Bend, Oregon.