New Jersey Enterpreneur - Small Business, Entrepreneurs and Venture Capital

According to SBA New Jersey District Director James A. Kocsi, there was a 18 percent decrease in loan approvals and an 11 percent drop in dollar value of approvals during the first six months of fiscal year 2008. Last year, the agency approved 1,697 loans for $268 million during the same time period. This drop in loan activity mirrors a trend that the SBA is seeing on a national level.

"It is a challenging time for all of us at the SBA," said Kocsi. "While some of our lending partners have raised their requirements to obtain business loans, including those made under the SBA’s loan guaranty program, most have not. However, some of these lenders report that the demand is down for small business loans due to the slowing economy and business owners taking a more cautious approach on expansion and new business plans."

"The good news is that interest rates have decreased, resulting in lower borrowing costs for small business owners," said Kocsi. "The other encouraging news is that the money from the federal economic stimulus package is expected to boost consumer spending in the coming quarter and that will benefit small business owners."

Despite the downturn, Kocsi sees positive trends among banks that are increasing their lending activity this year. "JP Morgan Chase, Innovative Bank, 1st Constitution Bank, Millennium bcpbank and Central Jersey Bank are actively seeking to support qualified small borrowers." said Kocsi. "It’s an encouraging sign and tells me that we have to continually work with our lenders to remind them of the benefits that SBA loan programs bring to their customers."

Women, minority and veteran-owned small businesses also saw a drop in loans from the SBA. Kocsi noted that during the first six months of fiscal year 2008, African-Americans received a total of 108 loans for $13.1 million; Hispanic-Americans 121 loans for $13.6 million; and Asian-Americans received 431 loans for $65.8 million.

According to Kocsi, women-owned businesses in New Jersey received 349 loans for $48.9 million during the first six months of fiscal year 2008, while veteran-owned businesses received 38 loans for $7.1 million.

Bergen County led the way in SBA loan approvals, during the first six months of Fiscal Year 2008, with 289 loans for $30.3 million; Essex County followed with 118 loans for $14.7 million; Middlesex County had 105 loans for $18.7 million; Monmouth County had 104 loans for $21.7 million; and rounding out the top five counties was Morris County with 90 loans for $14.2 million.

Kocsi also noted that the top five SBA lenders in New Jersey for the first six months of Fiscal Year 2008 were: JPMorgan Chase Bank with 164 loans for $7.2 million; Bank of America also with 164 loans for $5.3 million; PNC Bank with 148 loans for $10.4 million; Innovative Bank with 98 loans for $2.2 million; Commerce Bank with 88 loans for $30.7 million and BNB Bank also with 88 loans for $28.2 million..