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The number of loans and the dollar amount the agency guarantees in loans fell both nationally and in Fresno County during the last fiscal year.
In Fresno County, the number of loans dropped 28% to 195 in the 2008 fiscal year, which ended Sept. 30.
Nationally, the number of loans dropped 29% to 78,317.
The dollar value of the loans in Fresno County fell nearly 11% to $65.4 million. And nationally, the dollar value fell 13% to $18 billion.
The decreases are a reversal from several years of record-breaking increases for SBA loans, which are made by conventional lenders.
Plummeting demand for loans accounts for some of the decrease, said Carlos Mendoza, Fresno's SBA district director.
"Small businesses are really facing hard times," he said.
Dan Doyle, president of Central Valley Community Bank, said most of the small-business loans the bank makes are for companies that are expanding, which isn't happening right now.
"Most of the small businesses are doing everything they can to avoid borrowing just because of the uncertainty of the economy," he said. "They're tending to try to control their expenses and not have to pay the interest expense" on a loan.
The SBA offers two types of loans. The 7(a) program is used for working capital, such as buying inventory, and saw a large drop in Fresno County, Mendoza said.
In the past, some lenders relied on not much more than a FICO score to determine whether a customer was creditworthy with those loans, Mendoza said. That has changed.
The 504 loans, used mostly to purchase property or remodel a building, continue to require more in-depth information. Some customers and lenders are shifting away from the 7(a) loans and toward the 504 loans, Mendoza said.
There are bright spots in the lending world.
The 15-county Fresno District Office made 53 loans to black business owners in 2008, a 76% increase over last year. Public Affairs specialist Melende Ward attributed the increase to outreach to those businesses.
And both SBA representatives and bank president Doyle said there is plenty of money available for people who qualify.
Banks such as Central Valley Community Bank are not affected by many of the credit problems in the news, Doyle said. And interest rates are low.
"We have lots of money to lend," he said. "We're still making loans."
The reporter can be reached at bclough@fresnobee.com or (559) 441-6431.
To see more of The Fresno Bee, or to subscribe to the newspaper, go to http://www.fresnobee.com Copyright (c) 2008, The Fresno Bee, Calif. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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