More Than 360 Banks No Longer Active in SBA Programs
WASHINGTON -- Over the past two years, 368 banks have stopped participating in the Small Business Administration's lending programs, the agency said.
During his Jan. 22 State of the SBA Speech, Administrator Steve Preston said the losses represent a 7% decline in the number of banks that have outstanding SBA loans. Most would think it's because of the agency's fees, Preston said, but banks are actually complaining about the complexity of SBA's rules, slow turnaround times, paperwork "burdens," and lack of support when banks have issues.
"There is a fundamental connection between the effectiveness of our programs and the way we deliver them," Preston said. "A related fact is that efficiency does not have to come at the cost of effectiveness. Through smarter processes, better technology, and a more coordinated, better trained organization, you can provide better service at lower cost."
The 368 figure was a net change in the number of banks that were actively making loans, said Mike Stamler, director of SBA's press office. The change does not include credit unions, he added. Nearly 400 credit unions are SBA lenders.
Preston said the agency has undergone several reforms during his 18-month tenure including a complete overhaul of the disaster assistance loan program. SBA's small business loan portfolio has grown to $76 billion in the last fiscal year, compared to $49 million in 2001.