innovate arkansas

(To view a pdf of the top SBAs, click on either Part One or Part Two. A spreadsheet version is also available here.)

The year 2007 was a record-setting one for Small Business Administration-guaranteed loans nationally, but the same was not true in Arkansas.

The number of loans approved through the SBA's Little Rock office in the year that ended Sept. 30, 2007 - 538 - was a 16 percent decrease from fiscal 2006. And the total value of those loans, $126.1 million, was down 22 percent from the previous year.

Linda Nelson, director of the SBA's Arkansas District Office, said Arkansas was one of several markets where a multiyear streak of steadily increasing SBA lending came to a halt last year.

In fiscal 2006 and part of 2007, SBA lending by Louisiana financial institutions was processed through Little Rock; the Louisiana District Office was a victim of Hurricane Katrina. That mix is reflected in the list of SBA lenders on Page 21.

Most of the loans, 496 valued at $99.6 million, were made under the "7a" program that provides general financing and working capital for small businesses. The other 42 loans, totaling $26.5 million, were part of the "504 program" of long-term financing for fixed assets.

Arkansas Capital Corp. Group, the perennial leader in SBA lending in Arkansas, made 59 loans last year - 20 by Arkansas Capital Corp. under the 7a program and 39 by Six Bridges Capital Corp. under the 504 program. That's a decline from 69 made in both programs the previous year, and the total value of the loans, just under $34 million, was down from $36.4 million in fiscal 2006.

And ACCG wasn't alone.

"Two of our top state lenders, their volume dropped, and they will probably tell you why," Nelson said. "It had to do with a review process we're subjecting them to."Those are ANB Financial of Bentonville, which went from 26 loans worth $13.9 million in 2006 to 17 loans worth $7.4 million in 2007, and Metropolitan National Bank of Little Rock, which made 90 SBA-backed loans worth $10.6 million in 2006 and only 51 worth $6.3 million in 2007.

"Metropolitan National Bank is proud to be one of the top SBA lenders in Arkansas year after year," President and CEO Lunsford Bridges said in an e-mail to Arkansas Business. "Our SBA division did see a decrease in the number of SBA loans in FY 2007 as compared to 2006. The decrease can be attributed to a slowing economy and tightening of our underwriting procedures. We have also incorporated many new 'best practices' in our SBA division such as working closely with our small business loan prospects to develop comprehensive business plans to ensure their success."

ANB Financial remains No. 2 among Arkansas SBA lenders, but Metropolitan - No. 3 last year - dropped one notch. Taking its place at No. 3 was Cit Small Business Lending Corp. of Livingston, N.J. Cit had 13 loans totaling $6.3 million approved in the Arkansas district in 2007, up from four loans worth less than $1.6 million in 2006.

The year 2007 was also good for the West Central Arkansas Planning & Development District in Hot Springs, the only Arkansas lender besides Six Bridges to make 504 program loans last year. As in 2006, West Central Arkansas P&D made three 504 program loans, but they were much bigger - averaging over $1 million each. In 2006, the lenders' three 504 loans totaled less than $800,000.

Nationally, the SBA guaranteed 110,275 loans worth more than $20.6 billion during fiscal 2007. The number of 7a loans topped 99,600, although the total value was actually down slightly from 2006.

Nelson said the SBA's current administrator, Steve Preston, has impressed upon the agency the importance of both total numbers of loans and the total value, since the money loaned has a ripple effect through the economy.

According to the SBA, nearly a third of all SBA-backed loans last year went to start-up businesses and a third went to minority borrowers. The number of loans made to African-American borrowers increased by 23 percent.

In June 2007, the SBA introduced the "Patriot Express Loan Initiative," which was designed to speed approval of guaranteed loans of up to $500,000 for veterans and members of the military community who want to start to expand a small business.

As of November, six loans had been approved in Arkansas under the Patriot Express program, and four had been disbursed. The first borrowers were Elite Concrete & Pools LLC of Springdale, G&R Rifles of Conway and Northwest Overhead Door Co. of Rogers, all of which borrowed through Bank of America, and Stealth Recovery Team LLC of Benton, which borrowed through Metropolitan National.