Community Bankers Scale Back SBA Micro Loans, Survey Shows
NEWARK, N.J. - Some community banks are not enthused about the SBA's micro loans. They're dropping the loans from their offerings, according to the Community Bank Competitiveness Survey 2005 survey from the ABA Community Bankers Council and ABA Banking Journal. Four percent of banks surveyed said they have dropped SBA micro loans. Over the past 12-month period, bankers dropped the following in order of most commonly to least commonly: a tie between factoring products and auto leasing at 6.9%; equipment leasing at 6.6%; and state-guaranteed loans at 4.7%. The SBA micro loans were the fifth most commonly dropped business product. Bankers were more inclined to offer credit lines to businesses at more than 84% followed by working capital loans at 80.6%. A little over 52.5% surveyed offered SBA 7(a) loans with 50.3% offering accounts receivable financing, 48.8% doing merchant card processing; and 45% offering SBA 504 loans. Nearly the majority surveyed, 94%, said construction loans and commercial mortgages were their most commonly offered business credit-related products. Commercial term loans were offered by 91.6%, the survey showed. Business credit cards are offered by only 35.3% of the community banks surveyed. SBA micro loans are offered by 27.5%, equipment leasing by 26.3%, state-guaranteed business loans, 24.7%, business auto leases, 9.4%, and factoring, 6.3%. A comparison of business credit cards vs. consumer credit cards offered indicates that fewer banks offer business credit card service (35.3%) than offer consumer credit card service (45.3%).