SBA Loans for Capital Region Startups and New Businesses Doubles from Pre-Pandemic
The number of Capital Region startups and new businesses receiving funding from the Small Business Administration’s 7(a) and 504 programs has doubled since before the pandemic, according to a Center for Economic Growth (CEG) analysis of SBA data.
Loan Volumes
In fiscal year 2022, 63 SBA 7(a) and 504 loans were approved for startups and new businesses (<2 years old) in the eight-county Capital Region. That was up 37 percent from the previous year and up 75 percent from five years earlier.
In fiscal year 2022, 56 of the SBA loans for startup and new businesses were 7(a) loans, which can be used for real estate purchases, working capital, debt refinancing, and business acquisitions. Six of the SBA loans for startup and new businesses were 504 loans, which can be used to grow businesses or create jobs through the purchase or construction of facilities, machinery or equipment, or the modernization of facilities or infrastructure.
Loan Amounts and Jobs Supported
The gross approved amount for fiscal year 2022 in current dollars was $14.8 million in 7(a) loans and $3.6 million in 504 loans, totaling $19.4 million. When adjusting for inflation, that was a 1.3 percent increase over the previous year and a 126.1 percent increase from five years earlier, in chained 2012 dollars. In fiscal year 2022, that funding supported 371 jobs at the startups and new businesses. While that was an 18.6 percent decline in jobs supported from the previous year, it was a 0.5 percent increase from five years earlier.
Recipients
Between 2018 and 2022, the greatest share of 7(a) and 504 loans went to startups and new businesses in the accommodation and food services sector (25.7 percent). Other top sectors for 7(a) and 504 loans among Capital Region startups and new businesses were construction (11.2 percent); retail trade (10.6); other services (10.1 percent); and arts, entertainment and recreation (8.9 percent).
The SBA data does not disclose the business names of 7(a) loan recipients, but it does for 504 loan recipients. The six Capital Region startup and new buusiness 504 loan recipients included 2142 Hamburg Storage in Schenectady, King Pin’s Alley Latham in Colonie, Eagle Summit Properties in Rotterdam, Pantry on Main in Tannersville, Cramer’s Point Motel & Cottage in Lake George, and Empire Riverfront Ventures in Coxsackie.
CEG INITIATIVES
As a regional technology center under the New York Manufacturing Extension Partnership program, CEG’s Business Growth Solutions (BGS) unit offers a menu of support services for entrepreneurs. CEG is also an operational partner of Innovate518, a collaborative effort managed by the University at Albany of incubators and accelerators and co-working spaces.
On April 20, CEG BGS will host a VentureB pitch event and it is preparing to host a VentureB Innovation Series, which will feature four consecutive workshops for startups/entrepreneurs. CEG is also an affiliate of the Capital Region Chamber, which provides support services for entrepreneurs include, loan programs, entrepreneur boot camps and an MWBE program. The Chamber’s spring boot camp is ongoing and the fall boot camp will start in September.
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