2012 was a good year for 7(a) lending and 2013 promises a repeat. Fiscal 2012 saw dollar volumes down from almost $20 billion in approved loans in 2011 to just over $15 billion in 2012. Numbers of applications approved was also down from 54 million in 2011 to just over 44 million in 2012. While the numbers were down year-to-year, the growth trend continues with 2012 coming in at 20% over fiscal 2010. For the first quarter of fiscal 2013 as of 12/31/2012, dollar volume was up 21% over the same time last year.

Investors continue to favor SBA loans as premiums in the secondary market for 7(a) sales steadily increased in 2012. In the past week we have seen premiums of 14.932% for a ten year loan and a record 18.955% for a twenty five year loan. Less than a year ago twenty five year loans were just getting in the 14’s.

We feel that SBA lending will continue to be the best place for community banks to invest their loan dollars. With uncertainty still in the economy, banks will want to continue to preserve capital and maintain liquidity while earning substantial fee income. The 7(a) program provides these objectives while serving the needs of the small business community.

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