By Jessica Borders
Times West Virginian
The U.S. Small Business Administration has recognized Huntington Bank for going “above and beyond” in SBA lending.
Judy K. McCauley, district director of the SBA’s West Virginia District Office in Clarksburg, said all SBA offices provide information on a regular basis on the number and dollar amount of SBA guaranteed loans that are given out by banks. This data is published monthly, and many financial institutions want to know if other banks are running close to their figures.
The SBA recently published this year’s lending statistics, with the fiscal year ending Sept. 30, 2012, for its 7(a) and 504 loan programs.
“7(a) is a guarantee from the federal government,” McCauley said.
Although the customer and the business may be sound, the loan may be a little bit too risky for the bank’s board, she said. But if an SBA guarantee is put on the loan, the bank is able to get part of that money back from the federal government if the borrower defaults. The SBA provides a 50 to 85 percent guarantee on these loans.
McCauley said it takes a special initiative for a bank to look at a company that’s innovative and has unique ideas, which is different from funding a piece of property, to determine if that business can be profitable and if lending money to it is plausible. That federal guarantee takes some extra work, such as reading the regulations and understanding how to secure those loans.
Huntington Bank has knowledgeable people on its staff and does an excellent job of making loans to businesses that are considered high-risk, she said.