SBA loans up by 61% on LI since October

Federal efforts to make Small Business Administration loans more accessible have helped boost lending on Long Island by 61 percent since October, the agency said.

From October through May, the agency handled loans totaling $74.5 million, said Al Titone, deputy district director for the New York District Office. That's up from $46.1 million in loans during the same period a year ago.

To address the markets that froze in October 2008, the Recovery Act temporarily increased federal loan guarantees and eliminated fees for certain loans.

Normally, the SBA would guarantee 75 percent or 85 percent of a loan, but that was temporarily increased under the federal legislation to 90 percent.

"That really got banks to take a little more risk," Titone said. That part of the program ended last week.

Congress would also have to extend the provision that waived fees to borrowers on some government-guaranteed small business loans, he said.

One Long Island company that saved money from the fee waiver was Habberstad Volkswagen in Huntington Station, according to Titone. The dealership took out a long-term SBA-backed loan of nearly $1 million for expansion or modernization and saved $22,000 on fees, according to agency officials. The dealer didn't return calls seeking comment.

According to the SBA, loan approvals nationwide for April were about 33 percent above the monthly average for fiscal 2009 and 3 percent below the monthly average for fiscal 2008. The program has prompted more than 1,200 lenders to make SBA-backed loans for the first time, the agency said.