I talked to my friend Tony Wilkinson at the National Association of Government Lenders and he indicated that the 7a program is doing well but money may run out in late September just before the next fiscal year. It does appear however that money will be there next fiscal year.
Some interesting numbers. Lending overall to small business for the first quarter was down from $624 billion to $609 billion. What is really interesting is that 52% of the outstanding small business loans have a maturity of 1 year or less and about 24% are outstanding one to three years and 24% are three years or more.
Of that amount 7a and 504 loans are 60% to 70% of the loans. That is not the way the market should work with the so called lender of last resort has the majority of the market for loans 3years or more.
I don’t know if you saw that Bank of America is going to charge almost 30% interest if you are lat on a payment on a credit card.
If any of you tried to do this in our business with our customers it would be considered usury.
Small Business California
2311 Taraval Street
San Francisco, CA 94116