Executive Summary

It was another banner year for small-business lending in Los Angeles County. For the fiscal year ended Sept. 30, the 25 largest lenders on the list made a combined 1,766 SBA loans worth $561.6 million. Lenders are ranked by the total value of loans made in L.A. County under the 7(a) program, the most common type of SBA loan, and the 504 program, loans that are made in cooperation with "certified development companies" (non-profits that participate with banks on SBA loans).

Bank of America is the biggest SBA lender in L.A. County, lending $73.1 million through 527 loans in fiscal 1998. The SBA's Los Angeles District Office, which covers L.A., Ventura and Santa Barbara counties, frequently has the highest loan totals of any SBA office in the nation. This year, lenders doled out $688.7 million in SBA loans in the L.A. district, up from $666.4 million last year. Three lenders in particular, each making their debuts on this year's list, have recently increased their operations here.

No. 24 United Commerical Bank loaned $5.9 million in L.A. County, up from only $250,000 last year; No. 16 California Center Bank increased lending from $4.7 million last year to $11.2 million this year; and No. 10 GE Capital Small Business Finance loaned $21.7 million this year, up from $4.7 million in fiscal 1997.

The Pacesetter

Bank of America, whose parent company just merged with NationsBank Corp., has emerged as the top SBA lender in L.A. County, both in terms of the number of such loans and the amount loaned. For the fiscal year ended Sept. 30, it made 527 SBA loans in L.A. County for $73.1 million, compared with last year's 196 loans for $47.2 million.

Tory Nixon, senior vice president in charge of BofA's Western region SBA operations, attributes the bulk of the increase to the SBA's Fastrack program. Launched at selected banks in 1997, the pilot program makes it easier for lenders to make loans of less than $100,000 by allowing them to use their own approval and documentation procedures, streamlining the process. In return, the SBA guarantees 50 percent of the loan, less than the 75 percent to 80 percent guarantees on most SBA loans.

Nixon said the program has been very successful for BofA in L.A. County. Because of the large number of small businesses in the area, many banks target Los Angeles especially its large population of minority small businesses for SBA lending. This leads to increased competition that benefits the small-business owners. Next year, Nixon expects Bank of America to further increase its SBA lending in L.A. County.

BofA's SBA operations fall under the Bank of America Community Development Bank, a subsidiary established in 1990, Nixon said.

For reprint and licensing requests for this article, CLICK HERE.