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Lender sees evidence demand is on rise for SBA loans

Small Business Administration lending totals in Nevada grew smaller in the fiscal year that ended on Sept. 30, but at least one lender sees evidence that demand for SBA loans is picking up again.

The total number of Nevada SBA 7(a) loans, the agency’s general-purpose product, has plunged to less than one fourth the total in 2007. The total amount in loans in Nevada fell by 59 percent since then.

The SBA reported 240 loans for a total $66.5 million last year. That’s down from 1,019 for $160.8 million in fiscal 2007. The latest total for Nevada 7(a) loans also slipped from 286 loans for a total $76 million in 2009.

SBA 504 loan numbers, which are 20-year, fixed-rate loans for equipment and owner-occupied real estate, have fallen like wounded birds.

The 504 category accounted for 54 loans totaling $34 million in the last fiscal year. That can be compared with 185 loans totaling $116.2 million for the 2007 fiscal year. The latest total also came in lower than the 68 loans totaling $41 million in the 2009 fiscal year.

The Nevada State Development Corp. led the 504 category in the latest year with 27 loans for $14 million.

"We are pleased with what we’ve done, but we’d certainly like to do better," said Diana Storo, senior vice president of the Nevada nonprofit corporation.

"Fortunately, it’s started to turn around," Storo said. Since Oct. 1, the Nevada development group has made 12 loans for $5 million. Another two loans are pending.

Storo attributed the turnaround to exceptionally low prices for commercial real estate and attractive rates that were fixed at 5 percent for 20-year loans in November.

The Nevada SBA website doesn’t show loan totals for the first two months of the fiscal year, and SBA District Director Edward Cadena didn’t return calls for comment Thursday.

However, it’s clear that the decline in SBA loans reflects the crash of the state’s economy over the last few years.

Wells Fargo Bank topped the list of SBA 7(a) lenders. The giant bank made 42 Small Business Administration loans totaling $17.1 million in Nevada during the last fiscal year.

U.S. Bank came in second with 38 loans for $7.6 million.

Bank of America, a national bank with a major presence in Nevada, made three SBA 7(a) loans for $613,000 last year.

Wells Fargo said it also produced the most loans under the Community Reinvestment Act, which encourages banks to make loans in low- and moderate-income neighborhoods.

The bank made 9,400 Community Reinvestment Act loans of less than $100,000 each for a total of $190 million in the Las Vegas Valley last year. It made 9,600 for more than $100,000 but less than $1 million each for a total of $268 million. Also, Wells Fargo made 1,000 loans to low- to moderate-income neighborhoods for $23 million.

"We want to say ‘yes’ to as many qualified borrowers as we can to provide them with the financial support they need to grow their businesses, retain employees and create new jobs in our community," Kirk Clausen, regional president of Wells Fargo, said in a statement.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

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