Small Business Administration loans for Nevada at highest point since 2008

By Buck Wargo

Tuesday, May 10, 2011 | 4:59 p.m.

The amount of Small Business Administration loans guaranteed in Nevada has reached its highest level since prior to the recession.

Elizabeth Echols, the regional administrator of the SBA, based in San Francisco, said it guaranteed $90 million in loans in the 2011 fiscal year that started in October. That’s up from $48 million in 2010, $57 million in 2009 and $112.7 million in the 2008 fiscal year that ended Sept. 30 when the financial meltdown started. The SBA guarantees portions of loans made by banks.

Echols, who was in Las Vegas Tuesday to hand out the agency’s 2011 Small Business Awards for the area, said the increase in loans is a reflection that the economy is improving. Many businesses weren’t willing to take on debt and focused on survival and now they are looking for funding to help them grow, she said.

“It’s still tough, but we’re starting to see activity out there,” Echols said.

The increase in loans is also an indication of what banks think about the economy and viability of those businesses by showing more of a willingness to lend, Echols said.

Echols said the bulk of the loans issued so far this fiscal year came in the October through December period before the SBA’s 90 percent loan guarantee ended. Some $57 million of the $90 million was issued in those three months, she said.

That loan guarantee has since reverted to a range of 75 percent to 85 percent, she said. The SBA has other loan guarantees for real estate and assets.

The program that expired Dec. 31 also allowed a maximum loan of $5 million instead of $2 million, she said.

The SBA has rolled out new loan guarantee programs this spring, and Echols said that should draw more interest.

Despite the increased lending, it still remains difficult for many businesses to get credit because banks have been tight in their lending standards, she said. Still, any increase is a positive sign, she said.

“I have talked to a many small business leaders, and they are definitely more optimistic going forward,” Echols said. “It’s still tough in Nevada, but we are definitely seeing more encouraging signs.”