Could the federal government's attempts to help out small businesses with the credit crunch be working? An article in today's Wall Street Journal gives some reason to think so:
In February, the latest month for which figures are available, 35% of newly approved 7(a) loans, the most popular SBA loan program, sold on the secondary market, according to the Government Accounting Office. That was up from 24% in January. From September 2007 to September 2008, before the credit crunch, 45% of approved 7(a) loans sold on the secondary market.
When plans were first announced, one SBA lender told me that the flagging market for SBA loans was mainly rooted in the larger issue of banks tightening. Could this increase in SBA loans be evidence that the overall credit crunch is abating?
Of course, this doesn't change the fact that SBA loans are not even close to the be-all and end-all of small-business borrowing. In fact, 58 percent of business owners have said they wouldn't be interested in SBA loans even if they were easier to get. The lack of businesses to borrow remains a significant problem.