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SBA Loans Hit Skids Due to Tightened Credit, Reduced Demand

WASHINGTON -- Declining creditworthiness, tightened credit by lenders and reduced demand for loans from small business borrowers has resulted in a nearly 30% drop in Small Business Administration loans during fiscal year 2008, the agency reported today.

By Michelle A. Samaad | Updated on October 30, 2008

WASHINGTON — Declining creditworthiness, tightened credit by lenders and reduced demand for loans from small business borrowers has resulted in a nearly 30% drop in Small Business Administration loans during fiscal year 2008, the agency reported today.

Although SBA said it posted a record year in 2007 with nearly 100,000 loans approved, that number dropped by nearly 30% in 2008. The dollar value of those loans declined by 13%, from a combined $20.6 billion in 2007, to $17.96 billion in 2008. Average loan size increased from $142,000 in FY 2007 to $183,000 in FY 2008, according to SBA.

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