Wilmington-based Live Oak Bank has been named the most active lender of SBA 7(a) loans for the sixth consecutive year, according to the U.S. Small Business Administration.
A 7(a) loan is the SBA’s primary business loan program, which can be used by small businesses for refinancing, acquiring, or improving real estate buildings, as well as for short- or long-term working capital. Live Oak Bank was the top lender by dollar amount during the SBA’s fiscal year, which ended on September 30, lending $1.8 billion to small businesses through this program. This represents an increase of almost $50 million over the runner-up, Huntington National Bank in Ohio, which lent $1.37 billion.
Despite being the top lender in terms of dollars lent and having the largest average loan size of the group according to the SBA, Live Oak Bank did not have the most loans nor the largest average loan size overall. During this fiscal year, Live Oak approved 1,215 SBA 7(a) loans nationwide.
One reason why these loans are becoming increasingly popular among small businesses is because they offer standard 7(a) loans typically have long repayment periods and low interest rates. The fact that interest rates have hit historic heights this year has only made these loans more attractive to borrowers who want to secure financing at a lower cost than traditional bank loans or other forms of debt financing. Additionally, because these loans are backed by government guarantees, they represent a less risky investment for banks and are more likely to be approved even if a borrower has a poor credit history or lacks collateral to secure other types of financing options.
It is worth noting that in order to qualify for an SBA 7(a) loan