SBA loan volume declines again in Nebraska

The U.S. Small Business Administration said that it guaranteed $140.5 million worth of loans in the state during the 2023 fiscal year, which ended Sept. 30.

That was down 29% from fiscal year 2022 and nearly 43% from the record set in 2021. It also was the lowest amount since 2018.

One of the big drivers in the decline was a huge drop in 504 loans, which are loans that allow businesses to buy large equipment or build, buy or expand buildings, and are facilitated through nonprofit lenders called certified development companies.

In fiscal year 2023 there were just 31 of those loans worth $35.2 million in the state, down from a record 85 loans worth $74.4 million in fiscal 2022.

Andrew Schnoor with Lincoln-based Nebraska Economic Development Corp., which is the largest 504 lender in a four-state area, said the number of loans in both 2021 and 2022 were “historical anomalies based on very low interest rates.”

“The numbers for the recent ’23 fiscal year have returned to a level of normalcy,” said Schnoor, who pointed out that the decline in activity in Nebraska was similar to what’s been experienced both regionally and nationally.

Nationwide, the SBA guaranteed $6.4 billion worth of 504 loans in fiscal 2023, down from $9.2 billion the previous year.

One area that continued to show strong demand this past year was the SBA’s microloan program, which provides loans of $50,000 or less to eligible small businesses and nonprofit child care providers.

The SBA guaranteed 88 Nebraska microloans for $1.5 million in fiscal 2023, similar to the 85 loans worth $1.6 million approved in 2022.

“Looking back this past year, we are reminded that we have strong, resilient, and thriving businesses all around our state. We have seen growth and expansion in many industries that may have struggled in past years,” Tim Mittan, the SBA Nebraska Office’s district director, said in a news release. “The SBA continues to play a critical role in helping small-business owners access capital for startups and growth.”

Two Lincoln-based banks were the top SBA lenders during the year. First State Bank Nebraska was No. 1 for loan volume, with just more than $15 million, and No. 2 in number of loans, with 33. Union Bank & Trust had the most loans, 36, and was second in volume, with just under $13 million.