Local small-business loans on the rise

Funding of Small Business Administration 504 loans provided through the Nevada State Development Corp. increased to $8.5 million in the second quarter, up 31 percent from the year-ago period, the nonprofit company reports.

The next three months should reflect even stronger growth with 17 loans for about $11.4 million, said Debra Alexandre, president of Nevada State Development Corp.

The increase in the number of loans and funding is a good barometer for Nevada's economy, she said. SBA 504 loans provide as much as 90 percent of funding for businesses to expand at rates that are typically below market. The money is used to purchase real estate, expand existing facilities or buy new equipment.

The delinquency rate in Nevada State Development Corp.'s loan portfolio decreased significantly from a year ago, another good indication that the economy is improving, Alexandre said.

"I'm pretty optimistic. From the numbers in the second quarter, it looks like it's going to be a good summer," she said.

"From our point of view, the remainder of this year looks like it's going to be better than the first half and significantly better than last year," she said.

NSDC has received 25 new loan packages totaling $18.2 million, nearly three times the amount from a year ago, the president said.

Businesses seeking financing include automotive service centers, restaurants, telecommunications and law firms. Health care remains strong, even through the recession.

"Our demand is way up," Alexandre said. "Those are new applications. Some will happen, and some will not, but it definitely indicates there's more demand for our loan product."

SBA 504 loans are provided for small businesses with a net worth of less than $15 million, and after-tax net income of less than $5 million, she said. Applications are processed quickly, in some cases preapproved within a day.

"We're seeing a definite improvement in the approval process," she said. "Things have picked up in our portfolio."

Established in 1981 with offices in Las Vegas and Reno, the Nevada State Development Corp. has funded more than 1,429 loans with an estimated combined value of $620 million.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.