A core loan program offered by the Small Business Administration is still recovering from the government shutdown.
For the first two months of the fiscal year, which began in October, 100 loans were approved through the SBA’s 7(a) program in the combined Buffalo/Rochester market, down 12 percent from 114 a year ago. The dollar value of those loans dropped 52 percent, to $11.12 million.
The program, which aims to help small businesses that are trying to grow or expand, lost essentially half of October due to the partial government shutdown and has had to play catch-up since activity resumed. During November alone, 60 loans were approved, compared to 61 a year earlier. But their combined dollar value was only $7.4 million, down 46 percent from $13.8 million the year before.
First Niagara Financial Group was a notable exception. In November alone, First Niagara led institutions in the market in number of loans – 19 – and dollar volume – $2.2 million – and the bank recorded increases in both categories from a year ago.
“Generally we’re seeing a better environment for small business lending across the board,” said Chris Earle, First Niagara’s SBA department manager. “That’s not just in Buffalo and Rochester, thankfully” but across the bank’s business footprint.
First Niagara continues to actively outreach to customers with the SBA loans, which is helping driving the bank’s activity in that segment, he said. Earle said he also expects the SBA’s decision to cut fees for some loans to have a positive effect on the program heading into 2014.
Through the first two months of the federal fiscal year, M&T Bank Corp. led in the Buffalo and Rochester market in that type of SBA loan approved and dollar volume. M&T had 32 of the loans, compared to 37 a year ago. The combined dollar value of those loans was off 49 percent from a year ago, to $3.3 million.
M&T said its dropoff was caused by mainly by the small number of loans during shutdown-affected October, said Al Luhr, M&T’s senior vice president for business banking in Buffalo. Luhr said the backlog that was created its slowly being cleared, and that November was a relatively normal month for M&T’s pace of lending, both in Buffalo and other communities the bank serves.
Five Star Bank was third in the SBA loans approved in October and November with 17. The loans’ dollar value was down 78 percent, to $1.2 million.
M&T, First Niagara and Five Star accounted for 65 percent of all of the 7(a) loans approved in October and November, and 63 percent of the dollar value.