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The number of Small Business Administration (SBA) loans surged last year in Orange County, though the total dollar value dropped.
SBA lending is supported by the federal government, allowing financial institutions to provide business loans with more favorable terms or more flexible underwriting criteria than conventional loans.
The 15 Small Business Association lenders surveyed by the Business Journal this year arranged for 400 loans for the fiscal year ended Sept. 30, 2024, a 25% increase over the year before.
However, the dollar value of the lending dipped nearly 9% to $265.3 million.
Ron Galati, a lender relation specialist at the Orange County/Inland Empire SBA office, told the Business Journal that the decline in dollar value of SBA lending was due to “businesses likely being more conservative” on taking on additional debt amid “continuing higher interest rates.”
Business Finance Capital of Los Angeles, which ranked No. 1 on the list, arranged for 30 SBA loans last year, and the total dollar amount increased 15% to almost $50 million. Second-ranked California Statewide Certified Development Corp., with a location in Brea, saw the total value drop 19% to $36.3 million while the number of loans was up by one to 29.
TMC Financing Sees Increase
Nonprofit TMC Financing in Newport Beach maintained its No. 3 ranking on the Business Journal list, with $35 million in SBA loans last year—a nearly 12% drop from the previous year.
TMC Senior Vice President Jennifer Davis told the Business Journal the current level of lending shows small businesses continue to view real estate ownership as a path to stability and growth, with the help of the real estate oriented SBA 504 loan program.
“Through the first half of the fiscal year, over $65 million in total project costs have already been financed, putting this year on pace to rival the post-COVID lending boom,” Davis said.
U.S. Bank came in at No. 6 as its SBA loan value was almost flat at $20.4 million last year slightly less than 2023 (see story, page 23).
Catherine Jooyan, who is U.S. Bank’s lending chief for Small Business Association loans for all of California, says she’s seeing “really strong interest” from clients in Orange County and California.
“We are well positioned to help them grow in 2025,” she said.
Around 60% to 70% of the loans are for buildings, either an acquisition or refinancing. Most of the remainder revolve around business acquisitions or partner buyouts, the bank says.
CBC Looking National for SBA Loans
Though it was ranked No. 13, Commercial Bank of California made the largest year-over-year increase in SBA loans, growing 683% from $600,000 in 2023 to $4.7 million last year.
The locally based bank also makes it clear it’s looking beyond local borders.
“Most recently, we welcomed a new SBA business development officer based in New Jersey who will oversee our East Coast and Midwest territories,” Commercial Bank CEO Ash Patel told the Business Journal. “This strategic hire allows us to deepen our national footprint, explore new industry segments and better serve small businesses across a broader range of markets.”
So Cal CDC in Mission Hills with a focus on community development, was No. 15 on the list, as its SBA loans dipped 33% to $2 million last year.
Its lending ranges from “microloans to larger-scale funding.” n Research Director Desmond Celo contributed to this report.