Muncie Times, Muncie, Delaware County, 7 November 1996 — Page 7

The Muncie Times, November 7, 1996, SBA loans reach a record $10.2 billion in fiscal 1996

Indianapolis, Ind.—The U.S. Small Business Administration's (SBA) primary commercial lending programs, which made a record-setting SI0.2 billion in loan guarantees in fiscal year 1996, provides evidence of a strong economy, SBA Administrator Philip Lader recently said. In addition, $1.7 billion in financing and bonds to small businesses was made possible through other SBA programs in 1996. “The results for 1996 reflect the SBA’s continued role in providing greater access to capital for the nation’s entrepreneurs, who in turn are creating jobs, paying taxes and supporting a healthy economy,” said Lader. Peter W. Barca, SBA Midwest regional administrator, said that he is proud that the Midwest is leading the nation in growth. "Our growth in loan volume has exceeded the nation’s as the manufacturing sector has rebounded dramatically from the late ’80s and early ’90s. We have been redoubl ing our efforts at the SBA in key industrial communities,” said Barca. A good indicator of the economy’s strength is the continued growth of the SBA’s 504 development company program which provides investment capital for business expansion. In 1996, the program grew from $1.6 billion to nearly $2.5 billion. The program has grown 274 percent since the beginning of the Clinton administration. According to Barca, “The SBA’s 504 program is one of the nation’s premier fixed asset financing programs. It offers a fixed rate for terms of up to 20 years. The longer term provides for lower interest payments and the fixed rate offers security to entrepreneurs from down-turns in the economy, which can increase their costs through higher interest rates.” In the Midwest, Barca

reported a 57 percent growth in 504 financing this fiscal year, from $317,933,000 to $499,874,000. Over the past four years, the number of 504 loans has grown by 153 percent, from 558 to 1,408. “Locally, the number of 504 loan approvals increased to 196, up 52 percent over last year,” said Indiana District Director Janice E. Wolfe. “With the approvals totaling over $59,000,000, the 504 program indisputably remains a successful avenue for Indiana borrowers. Additionally, these loans resulted in the creation of 2,188 jobs in Indiana.” In the 7(a) program, the agency’s other large lending program, levels for fiscal year 1996 reached their secondhighest historical level of $7.7 billion, finishing just behind the $7.8 billion program level of 1995. The record was not exceeded largely due to the onemonth government shutdown and the greater amount of small business financing made available by private lenders. The 7(a) program, which provides loan guarantees for entrepre- . neurs seeking to start or expand their businesses, has doubled during the Clinton administration. “Despite the government furlough and the increased amount of capital available to small businesses through private lenders, the SBA’s 7(a) loan guaranty program continues to be a valuable asset to Indiana’s small business community,” said SBA Indiana District Director Janice E. Wofe. “407 loans guaranteeing over $66,000,000 were approved by Indiana’s District Office during fiscal year 96.” In the Midwest, Barca reported that in fiscal 96 $945,128,000 in 7(a) financing ranked third-highest to the 95 and 94 levels, $1,145,507,000 and $984,399,000 respectively. Over the past 4 years, the

number of 7(a) loans has grown by 120 percent from 2,930 to 6,458. “President Clinton directed the SBA to improve entrepreneurs’ access to capital as a key part of his economic plan,” said Lader. “A reinvented SBA continues to do so at record levels, and the jobs created by these entrepreneurs are the heart of our nation’s healthy economy.” Today, small businesses account for 50 percent of American’s gross domestic product and employ 54 percent of the nation's private workforce.

In addition, the SBA’s Small Business Investment Co. (SBIC) program continued to attract record levels of private capital commitments. This year, over 1,850 SBIC financings were made with a value exceeding $ 1.3 billion. In addition, 22 new SBICs were licensed, bringing $161.2 million in private capital into the program; the SBA provided $375 million in leverage to these SBICs. “To best serve America’s entrepreneurs and to contribute pages of SBA regulations by 50 percent and improving aspects of SBA’s management policies.

as exemplified in our Liquidation Improvement Project.” Under the Liquidation Improvement Project, an agency-wide initiative, the SBA has committed to complete more than 70 actions that will further improve SBA’s liquidation activity. Additional SBA accomplishments for fiscal year 1996 include: • The SBA sustained the advances made in recent years, with 20 percent of loan guarantees going to minorityowned businesses and 23 continued p a g e JS

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