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Small businesses tap SBA loans

Boston’s DBEDC tops list of partner microlenders

Norman Eng
Small businesses tap SBA loans
(l-r) SBA MA Deputy District Director Peter Kontakos; DBEDC Loan Officer Anthony Ciavattone, DBEDC Loan Officer Brenda Guerra, DBEDC Director of Economic Development Johnny Charles and DBEDC CEO Perry Newman accepted the award on behalf of Dorchester Bay Economic Development Corporation; SBA MA District Director Bob Nelson; SBA MA Lead Lender Relations Specialist Ili Spahiu). PHOTO: COURTESY SBA

The Small Business Administration supported capital to 1,971 firms in Massachusetts last year, according to SBA Massachusetts District Director Robert H. Nelson.

“Together with over 135 different lenders using SBA loan programs, over 6,000 jobs were created and 7,600 were retained according to self-reported figures,” Nelson said during the agency’s annual meeting Nov. 8 at Clark University in Worcester. “We thank all of our partners and friends for working with the SBA to ensure small businesses get the access to capital they need to expand.”

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Through the 7(a) Loan Guaranty, 504 Loan and Microloan programs, the SBA partners with banks and other lending institutions to help small businesses with capital needs.

This year, fewer small businesses in the Commonwealth relied on SBA lending, but business owners that needed the access to capital used SBA loan programs for higher-value projects.

Through the SBA’s flagship 7(a) Loan Guaranty Program 1,593 loans were approved in Massachusetts for a total of more than $357 million supported by a network of 118 lenders, including 12 credit unions. 

Eastern Bank was the number one SBA 7(a) lender in Massachusetts for the 11th year in a row and number one 7(a) lender in New England for the 10th year in a row, with 415 loans totaling $41.66 million. 

The 504 Loan Program approved 247 loans, supporting more than $156.31 million. Third Party loans, which are part of the 504 projects, totaled in excess of $205.55 million. Bay Colony Development Corporation was SBA’s highest producer of 504 loans in Massachusetts, with 92 loans totaling $56.31 million.

The SBA Microloan program, through 10 microloan intermediaries, approved 131 loans totaling $2.33 million. Massachusetts microloan approvals increased by 22 percent and dollar amount increased by 12.5 percent; this was the largest growth area in the state. Accion East, Inc. approved 33 SBA Microloans totaling over $451,000 in fiscal year 2019 — more than a quarter of all microloans in the state.

Dorchester Bay Economic Development Corporation was named the Massachusetts Breakout Microlending Intermediary of the year, with 22 microloans approved, totaling over $237,900 in fiscal year 2019. Their activity this year represented a 220 percent increase in approvals.

While the majority of the loans went to established businesses, about 29 percent of total loan approvals went to new businesses, two years old or less. Cambridge Savings Bank was the Lender of the Year to New Businesses, with 64 percent of their loans going to new businesses this fiscal year.

About the U.S. Small Business Administration

The U.S. Small Business Administration empowers entrepreneurs and small business owners with the resources and support they need to start and grow their businesses. It delivers services to people through an extensive network of SBA field offices and partnerships with public and private organizations.

Norman Eng is a public affairs specialist with the Massachusetts District Office of the Small Business Administration.