Despite stimulus package, SBA-backed loans declining locally.

The U.S. Small Business Administration churned out a press announcement this month noting the big turnaround in lending activity as a result of the American Recovery and Reinvestment Act, also known as the $787 billion stimulus program.

Since the program launched in February, the SBA said it guaranteed $11.3 billion in loans nationally made by its partner banks. The average weekly volume after the stimulus program increased to $275 million compared with $165 million weekly before the stimulus took effect.

The San Diego District office, which encompasses San Diego and Imperial counties, said a similar increase in lending was evident following the stimulus.

However, local SBA officials readily admit that this year is the lowest in terms of both number of loans approved and the dollar amount of the loans.

For the fiscal year that ended Sept. 30, the local office reported 520 SBA-backed loans, down 46 percent from 961 loans for the 2008 fiscal year.

The breakdown for the 2009 fiscal year was 392 loans in the 7(a) program for $96.6 million, and 128 loans in the 504 loan program for $80.8 million. Loans in the 7(a) program can be used for working capital or real estate purchases, while 504 loans can be used only for buying buildings the business is occupying.

In FY 2008, the local district approved 777 loans in the 7(a) program for $206.7 million, and 184 loans in the 504 program for $125 million.

The SBA also said that its micro-loan program was in such high demand, the $40 million allocated in stimulus funds was exhausted. In August, the SBA expanded the program with an additional $74 million, including $50 million for loans.

The micro-loans max out at $35,000 and are aimed at fledgling, home-based businesses. They can be used for working capital, supplies and office furniture.

Send any local financial news to Mike Allen via e-mail at [e-mail]. He can be reached at 858-277-6359.