South Dakota SBA office reports on 504 loan progress

10/24/2011

Through the Small Business Administration's 504 Certified Development Company Program, South Dakota's Sioux Falls office set lending records in fiscal year 2011, the Argus Leader reports.

Despite total lending dropping from $77 million to $63 million, the state's district office provided 62 of the 504 loans for a total of $32 million - much of which Chuck Hughes, deputy district director for the South Dakota SBA, attributes to the organization increasing its loan size eligibility from $2 million to $5 million. The state provided 72 loans for $24 million in 2010.

"We had a very high year last year, one of our best years, and a lot of lenders got loans out in 2010, which probably made it not as urgent for them to get the loans this year," Hughes said, accounting for the drop in total lending. "There was less lending ... Entrepreneurs and banks are a little more conservative."

The SBA's 504 program provides long-term, fixed-rate, mortgage financing for capital assets such as land, buildings and equipment.

Pacific Business News reported the SBA recently altered its 504 program rules to allow companies to refinance a business loan to turn real estate equity into working capital.