SBA loans up 30% in Miami area
By Rachel Tannenbaum
The volume of lending for Miami-Dade County in the Miami district of the US Small Business Administration, which helps entrepreneurs start and grow businesses, is up 30% in the second-quarter of this fiscal year over the second-quarter of 2011, said the assistant district director for marketing and outreach, area 1.
After three straight months of growth, Miami-Dade County's unemployment rate held steady at 9% in April, according to numbers released by the Beacon Council. The April 2012 unemployment rate for Florida was 8.3%, down 0.3 percentage points compared to March 2012, and the US unemployment rate was 7.7% in April 2012, compared to 8.4% in March 2012.
"Things are definitely looking up and heading in the right direction," said, Francisco A. Marrero, director of the US Small Business Administration's South Florida District Office since 2001. "Unemployment is going down, and as lenders strengthen their position, lending will pick up, although we all wanted this to happen yesterday."
Mr. Marrero said recovery is taking a long time — "it won't be overnight" — but that the SBA is definitely encouraged by what it sees.
The mid-year 2012 top industries in terms of the most loans by the SBA are office of physicians (except health specialists) with 42 loans; child day care services with 28 loans; veterinary services with 26 loans; full-service restaurants with 23 loans; plumbing, heating, and air-conditioning contractors with 15 loans; offices of dentists with 14 loans; general automotive repair with 13 loans; all other specialty trade contractors and hotels (except casino hotels), at 10 loans each; and all other professional, scientific and technical services, home care services, offices of certified public accountants and offices of lawyers, at nine loans each.
Mr. Marrero said he's encouraged by not only the numbers, but by the feedback he gets when he goes and speaks with small businesses throughout the county.
"I see more of a positive attitude. People are expanding and hiring across south Miami," he said.
Although small business loans are slowly increasing again, the Miami district has nearly doubled loans for exporting.
Since April 2010, the SBA has been offering more loans for exporting. The federal government's commitment to the president's National Export Initiative aims to double US exports and create 2 million new jobs by 2014.
The trend for exporting is also upward and Mr. Marrero said he will keep promoting these loans because "it is a wave of the future and a very important program."
Exporters can apply for the Export Work Capital Program (EWCP), which allows small businesses to finance their exports to cover the 60- to 120-day delay from the time they ship their products to the time they get paid.
"We look at exporting as a market that small businesses need to be playing in," Mr. Marrero said.
Mr. Marrero said he's confidence that as banks and lending institution stabilize and begin to emerge from the toxic loans related to real estate, they will begin to lend more. He said there's also a growing sense of optimism with small businesses in South Florida and "the evidence is in the increasing of loans."
Growth, he said, can be found in both new lenders and bigger banks lending again.
"We are seeing some of the larger lenders begin to increase their lending, but we are nowhere where we want to be," Mr. Marrero said. "We want to make sure all the large players come back to the table, because they account for most of the storefront, if you will."
Althea Harris, the assistant district director for marketing and outreach, area 1, said the SBA expects the demand from new lenders to increase while the banks work out their issues. She previously said that the SBA has been recruiting banks, especially small banks that haven't been affected as badly by the recession, but that the program is working to get larger banks back into the program as well.
"They are trying to get all the toxic loans off their balance sheets and balance all the federal regulations that have grown out of the 2008 housing crisis," Ms. Harris said. "They know they have to make loans to make money, and they want to make money."
She said banks are also going to try to make money from small business trying to expand.
"They need to take advantage from the failing banks, because not all made it through the recession," Ms. Harris said.
The fact that there are still businesses standing, Ms. Harris said, shows great optimism because a lot failed during the recession. As people become comfortable with where they are financially, she said, they will begin to expand again.
The Small Business Administration, founded in 1953, is a loan guarantee program, but the SBA doesn't provide grants or loans directly. It guarantees loans made to small businesses by other institutions.
Small businesses can also grow by expanding with the loans offered through the SBA.
Entrepreneurs trying to start a business or small businesses looking to expand can turn to the 7(a) loan guarantee program, a working capital program designed to help them through bank and non-bank lending programs, often when they aren't eligible for loans elsewhere.
The major types of 7(a) loans are express programs, export loan programs, rural lender advantage program and special purpose loans program.
"Our message is that we are encouraged by what we see and that there a sense of optimism beginning to grow," Mr. Marrero said. "I am cautiously optimistic that the worst is behind us."
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