Wednesday, April 3, 2013

SBA loans are good for the economy

For the six month period ending March 31st, 2013, SBA 7(a) loan approvals totaled $8,222,936,000.    While that’s an increase of 22% from the same period a year ago, it’s flat from the prior quarter.

As a matter of fact, SBA 7(a) loan volume has been stagnating since early last year.

Here is a breakdown of SBA 7(a) quarterly loan volume for the last year:

1st quarter 2013               $4,049,146,000
4TH quarter 2012             $4,173,790,000
3rd quarter 2012              $4,359,166,000
2nd quarter 2012              $4,039,042,000
1st quarter 2012                 $3,443,723,000

Notice how loan volume surged about 17% in the second quarter of 2012?  The third quarter also grew but only at about an 8% pace.  Since then loan volume has been slowly eroding.

This decline in SBA loan volume is rippling across the economy.

Gross domestic product surged at a 3.1% pace in the third quarter of 2012.   The fourth quarter slowed to a 0.4% annual rate.

The correlation of SBA 7(a) loan approvals with our nation's economic performance appears to be quite strong.

Just for fun I calculated the correlation coefficient between SBA 7(a) loan volume and GDP for over six years using the Microsoft CORREL function.  It came out to a statistically significant 0.86.

It will be interesting to see where the first quarter GDP numbers end up when the initial estimate is reported in a few weeks.

The prescience nature of SBA 7(a) loan volume with respect to the gross domestic product leads one to the inevitable conclusion that SBA 7(a) loans contribute positively to gross domestic product.

It should be everyone’s patriotic duty to get a SBA 7(a) loan.

No comments:

Post a Comment