TD Bank bounced Berkshire Bank as the top Connecticut issuer of loans backed by the Small Business Administration, with a fast-growing New York City firm leading in total dollar volume.
In the SBA’s 2017 fiscal year ending Sept. 30, TD Bank issued 83 business loans under the 7(a) program that allows banks to recoup most of the outstanding principal in the event of a default. TD Bank has its main local office in Wilton with 20 branches in southwestern Connecticut.
That amounts to nine more 7(a) loans than Waterbury-based Webster Bank, which financed $ 13.9 million in total debt versus $ 8.5 million for TD Bank. New York City-based Newtek Small Business Finance led the Connecticut 7(a) market in dollar volume in generating $ 17.4 million over 29 loans.
The SBA programs are designed to give banks confidence to lend to small businesses that might represent riskier profiles than their usual underwriting standards allow.
Across Connecticut over 12 months through September, banks upped their SBA 7(a) loans to just over 700 for nearly $ 208 million in capital, up 2 percent and 3 percent respectively from fiscal 2016, according to an itemized list furnished to Hearst Connecticut Media by the SBA’s Connecticut district office in Hartford.
Connecticut 7(a) loan transactions increased even as loans were down 2.6 percent nationally to about 62,400, though overall dollar volume increased by a wider margin at 5.5 percent to top $ 25.4 billion.
Under a separate 504 lending program focused on relatively complex deals like real estate and capital equipment purchases, Connecticut transactions were up 20 percent to 66 loans, though dollar volumes were off 9 percent to just under $ 33 million.
The SBA is run today by Greenwich resident Linda McMahon, who is speaking to business groups in Darien next week on her work to date and her stated goal of leveraging the SBA to increase entrepreneurship nationally. The agency announced late last month a new “Lender Match” program that allows those seeking loans to fill out an online form and connect with lenders within 48 hours. Lenders can optimize their search criteria to identify specific types of borrowers for particular lines of business or specialized financing.
Anne Hunt, director of the Connecticut district office in Hartford, told Hearst Connecticut Media her office has been working to collaborate more with the state Department of Economic and Community Development. DECD runs separately the publicly funded Small Business Express loan program created in the recession as another option for companies to secure credit, with grants also available under the program. The state added a requirement this year that companies seek financing in the private market before applying for a Small Business Express loan.
Alex.Soule@scni.com; 203-842-2545; @casoulman