Government-backed small-business lending remains sharply down from a year ago in Western New York, as the expiration of special loan incentives reduces the attractiveness of the loans.
From Oct. 1 through the end of April, 28 lenders had made 328 loans in the Buffalo and Rochester areas through the U.S. Small Business Administration's primary 7(a) loan program, totaling $52.25 million, according to new figures from the SBA's Buffalo District Office.
That's down 35 percent in the number of loans and 41 percent in dollars, from 507 loans for $88.55 million for the same period a year ago.
The SBA provides government-backed guarantees to qualifying small-business loans made by participating banks, giving the lenders more comfort in extending credit to businesses that might not otherwise qualify. Small businesses are important contributors to economic growth and job creation.
The agency had waived its fees and raised its guarantee under federal stimulus programs passed by Congress to kick-start the economy. That drove significant SBA lending activity, but those benefits have since expired.
Buffalo-based M&T Bank Corp. continued to comfortably lead local lenders, with 112 loans for $11.88 million. But that's down 37 percent and 65 percent, respectively, from 177 loans for $34.4 million a year ago.
Five Star Bank, the subsidiary of Warsaw-based Financial Institutions, was second with 56 loans for $6.55 million, down 22 percent and 42 percent, respectively.
Evans Bancorp and First Niagara Financial Group were tied for third in number of loans, at 23 each, followed by KeyCorp with 17 and Genesee Regional Bank with 16.
By dollars, Evans is third with $6.2 million, followed by Genesee Regional with $5.07 million, MB Financial Bank with a single loan for $4 million, and First Niagara with $2.93 million.
The bulk of the activity was among the top five or six lenders. Eleven other lenders had just one loan each in the past seven months, while three lenders had two loans apiece.
The banks also made eight loans for $3.18 million to exporters and 12 loans for $1.34 million to veteran-owned businesses.
The SBA also guarantees third-party loans for construction or fixed-asset purchases through its 504 program. Ten lenders had made 23 loans for $11.34 million in the last seven months, down from 37 loans for $18.58 million a year ago. They were led by M&T, with seven loans for $4.19 million, and Evans, with five loans for $1.58 million. Bank of Castile had two loans for $1.82 million.
SBA will host its 2012 Business Matchmaker & Expo on Wednesday in the Buffalo Niagara Convention Center, giving small-business owners an opportunity to discuss potential contracting opportunities with representatives from colleges, universities, large corporations and federal, state and local governments. Over 45 "buyers" and about 300 business owners are expected to participate. The cost is $30 per person.
Separately, the Small Business Development Center at Niagara County Community College is teaming up with State Sens. George Maziarz and Mark Grisanti to sponsor a seminar about doing business in Niagara County and what services are available to help companies. The program will be held from 7 p.m. to 9 p.m. May 17 at the college, 3111 Saunders Settlement Road, Sanborn, in the main cafeteria. The program is free.