The growth of small business is fueling the North Texas and U.S. economies, and lending is fueling that growth.
Statistics from the Small Business Administration show that North Texas is among the top recipients in the nation of SBA-backed loans. And statistics from Biz2Credit, which helps small businesses find funding, show that across funding sources, approval rates are rising.
The SBA backs loans made by lenders for up to 90 percent of the value of the loan.
Billion-dollar North Texas investment
For each of the last three years, SBA lending volume in the North Texas district has exceeded $1 billion. The amount of cash flowing to North Texas small businesses went up in the 2017 U.S. fiscal year even though the total number of loans declined. That implies that individual loans are getting bigger. Based on the dollar amount approved, Dallas-Fort Worth was fifth in the nation.
"[The North Texas statistics] show that there are larger loans being made, some for real estate, some for equipment. With the improving economy, we've seen more people willing to look for new locations. [North Texas] is in the Top 10 in the nation in the number of loans approved."
Bill Manger, head of SBA LendingWho gets funding?
Asian borrowers and borrowers of "undetermined" ethnicity gained the most in terms of loan approvals in the Dallas-Fort Worth district in the 2017 fiscal year while the number of loans approved for American Indians in the area saw a huge drop, from 34 to 12.
"Hurricane Harvey affected those loans [in Houston]. Going back before the floods ... there were loans in process and the weather affected those loans going through. I would have to say that was a major contributor. I know we had a tremendous amount of disaster assistance loans."
Yusef Muhammad, chief executive, American Business Television NetworkWho's the most generous?
If mom and dad can't help out, small business borrowers nationwide have a number of options for finding a loan. While approval rates from big banks have gone up since the last economic meltdown, those banks still have among the lowest approval rates. Institutional investors include pension funds. Alternative lenders include merchant cash advance services, which can charge higher fees.
"The economic downturn put a freeze on funding, and the big chill was especially painful for small business owners. With lenders opening their wallets more now, the drop in loan approvals for many minority borrowers is troublesome."
Karen Robinson-Jacobs, staff writer, The Dallas Morning NewsSOURCES: Biz2Credit; Small Business Administration