SBA Loans Are Good for the Economy

The Bureau of Economic Analysis is scheduled to release the advance estimate for first quarter Gross Domestic Product (GDP)  on Wednesday, April 30th. 

Where will it be?

Here is what GDP has been doing and this week’s interesting little table of data:

4^th quarter 2013              3.2%

3^rd quarter 2013              4.1%

2nd quarter 2013             1.7%

1st quarter 2013              1.1

4th quarter 2012:             0.1%

3rd quarter 2012:             2.8%

2nd quarter 2012:          1.2%

1st quarter 2012:            3.7%

Contrast that with quarterly SBA 7(a) loan volume:

1^st quarter 2014                $4,106,960,000

4^th quarter 2013:             $3,989,696,000

3^rd quarter 2013:             $5,371,662,000

2^nd quarter 2013              $4,273,683,000

1^st quarter 2013               $4,049,146,000

4^TH quarter 2012             $4,173,790,000

3^rd quarter 2012              $4,359,166,000

2^nd quarter 2012              $4,039,042,000

1^st quarter 2012                 $3,443,723,000

Notice how third quarter growth in GDP had jumped over the prior period?  Same thing happened with SBA 7(a) loan volume.

SBA 7(a) loan volume then fell off to end the year.  That might trickle into the first quarter's GDP.

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.