Bank of America Leads in Small Business Lending, Extending More Capital Than Any Other Lender

As part of its ongoing support for small businesses, Bank of America ranked number one among all banks in the amount of credit extended through the U.S. Small Business Administration's 504 loan program during the last fiscal year. Bank of America originated more than $297 million in first-trust deed loans and $233 million in second-trust deed loans, totaling over $530 million in long-term, fixed-rate financing. This is the second year in a row that Bank of America was the largest 504 lender by volume.

Key Takeaways:

• Bank of America originated over $530 million in long-term, fixed-rate financing through the SBA's 504 loan program in the 2010 fiscal year, exceeding the amount of any other lender.
• The 504 program provides financing for the purchase of fixed assets, such as real estate, buildings, and equipment, and is a valuable option for small business owners who want to grow their companies.
• Bank of America's leadership in providing 504 loans is unparalleled, with the bank being the largest lender by volume for the second year in a row.
• Jon Dowst, small business lending and SBA executive at Bank of America, noted that the bank's top ranking is a testament to its ongoing commitment to the nation's small businesses.
• The SBA 504 program has three elements: a first mortgage from a bank for 50 percent of the project cost, a second mortgage from a Certified Development Company (CDC) covering up to 40 percent of the cost and backed with a SBA guarantee, and a 10 percent down payment from the small business borrower.
• Bank of America has collaborated with CDC Small Business Finance to assemble the nation's first pool of SBA 504 first-mortgage loans for sale under SBA's new secondary market program.
• Through the first-mortgage pooling program, Bank of America initially purchased $27.2 million in 504 loans and created an SBA guaranteed pool of $25.6 million for distribution to investors.

Statistics:

• Over $530 million in long-term, fixed-rate financing extended through the SBA's 504 loan program in 2010.
• $297 million in first-trust deed loans originated by Bank of America in 2010.
• $233 million in second-trust deed loans originated by Bank of America in 2010.
• $27.2 million in 504 loans purchased by Bank of America through the first-mortgage pooling program.
• $25.6 million in SBA guaranteed loans created by Bank of America for distribution to investors.
• $1.6 million in unguaranteed loans retained by Bank of America from the initial purchase.

Sources:

• Bank of America Corporation
• U.S. Small Business Administration
• CDC Small Business Finance
• SBA's 504 loan program
• Bank of America's press release announcing the bank's collaboration with CDC Small Business Finance to assemble the nation's first pool of SBA 504 first-mortgage loans.