M&T Bank once again led the region in issuing U.S. Small Business Administration 7(a) loans, coming in sixth place for lenders nationally this year, according to the bank.
M&T’s small-business lending was driven heavily by franchise businesses and by the region’s growing cyber security industry, officials said.
In the Baltimore District – representing the state excluding Montgomery and Prince George’s Counties – M&T doled out 232 loans totaling $28.2 million, or more than 48 percent of the overall 7(a) loans issued here. The numbers represent a 20 percent increase in the number of loans and a 14 percent increase in dollar volume, according to M&T spokesman Phil Hosmer.
M&T also led the way in the Washington, D.C., Metropolitan Area District, which includes several northern Virginia counties as well as the remaining two Maryland counties. Here, M&T issued 128 loans totaling $18.8 million.
The local uptick reflects a national trend for M&T: The lender offered almost 6 percent more 7(a) loans this year compared to last, growing from 1,156 loans worth $162.8 million to1,226 loans worth $165.2 million.
The overall SBA loan dollars – both for 7(a) loans, the most common small business loan, and for 504 Certified Development Company loans for long-term, fixed-rate financing for major fixed assets — actually declined in the Baltimore market this year, said Ed Knox, lead lender relations specialist for the SBA’s Baltimore District office.
But that wasn’t because of any shortfall. The biggest reason for a slight decline, he said, is that last year set a record for dollar volume: a total of $2118 million for 471 loans. This year’s total was $192.5 million, he said, for 499 loans.
“It’s hard to increase over your best-ever year,” he said.
But like M&T, the Baltimore District saw an overall uptick in total 7(a) loans this fiscal year – from 432 loans worth $166,765,500 to 477 loans worth $168,537,100.
Trevor Garner, manager for M&T’s Business Banking group in Greater Baltimore, said one of the drivers for their increase in 7(a) loans was a 25 percent increase in franchise lending year over year. In particular, Garner said, the Mid-Atlantic region’s healthy cyber security industry provided a boost.
And Knox said the average loan size has been increasing in the years since the economic downturn, particularly now that the loan maximum is now capped at $5 million rather than $2 million.
It all adds up to good news for the small business community, Knox said. And as for M&T’s dominance in this arena, he said, the bank’s big footprint helps – along with a willingness to take on riskier propositions, like a startup or a restaurant, where one bad food critic early on could spell the end.
The numbers speak for themselves on this point, Knox said: The next-biggest lender, Wells Fargo, issued just 31 SBA loans.
“I think (M&T officials) have decided to take a vested interest in doing this,” he said.