Minnesota’s small business owners are glad to see an end to the federal government shutdown. During the shutdown, no one could get any new approvals for loans backed by the U.S. Small Business Administration. Now the SBA is back in business.
SBA staff was back to work on Monday, January 28. Employees immediately began sifting through backlogged emails and voicemails. How big is the backlog?
“We’re still getting our arms around it…we can catch up fairly fast,” Rob Scott, SBA’s Great Lakes Regional Administrator, told Twin Cities Business. “In Minnesota it’s been a little more complicated because of the weather.”
The state has been weathering extreme subzero conditions in the last few days.
The SBA’s Great Lakes territory includes six states: Minnesota, Wisconsin, Illinois, Michigan, Indiana and Ohio. Scott said that SBA lending is particularly strong in Minnesota.
“Minnesota has more chartered banks than any state in the country,” said Scott. “Minnesota is one of my strongest states in the region.”
Twin Cities Business previously reported on the frozen pipeline for SBA loan approvals.
SBA statistics indicate that there are approximately 513,000 small businesses in Minnesota.
For the SBA’s 2018 fiscal year (October 1, 2017 to September 30, 2018), the Minnesota District Office guaranteed 1,954 loans totaling approximately $613 million in the state. That worked out to roughly $51 million per month in SBA loans in the state.
Prior to the shutdown, Scott said that SBA loan volume for fiscal 2019 was down slightly.
“When times are good, we’re not used as much,” said Scott. “When times are bad, we become more popular.”
The SBA itself does not lend money. The federal agency guarantees a significant portion of loans made through its programs. SBA backing allows banks to lend to small business owners who otherwise would be unable to land a traditional loan to start or grow a business.
If lawmakers fail to reach a budget deal by the February 15 deadline, what about the possibility of a second shutdown?
“We’re operating like there isn’t going to be one,” said Scott.