Zions First National Bank issued $11.7 million in 7(a) Small Business Administration loans in 2013 to businesses in the Boise District, which includes all of Idaho except for the Panhandle. A total of 317 businesses in the district were approved for loans through the program.
The cap for SBA loans is $5 million. Cece Mitchell, Zions senior vice president and SBA lending manager, said the average Zions SBA-guaranteed loan is about $200,000. The SBA guarantees 75 percent of the loan value on loans of more than $150,000 and 85 percent on loans of less than $150,000.
The SBA offers several loan types. The 7(a) classification is the most commonly used.
The loan program exists to encourage small business lending, said Larry Demirelli, spokesman at the SBA Boise office.
“The program is designed to help businesses that don’t necessarily fit in the traditional guidelines for bank lending,” Demirelli said. “If they don’t fit those guidelines, possibly they’ll qualify for an SBA loan, which comes to banks with a guarantee.”
Zions approved SBA loans to 96 businesses in the Boise District. The loans remove some of the risk from Zions’ lending portfolio, Mitchell said.
“We get a good borrower that we can help grow and succeed,” Mitchell said. “We get term loans with a steady repayment stream. If there’s a default, we get part of our money back. It’s just a good, steady loan product for us.”
The capital from Zions SBA loans enabled businesses to hire 183 new employees and retain 408 positions, according to the bank.
In September, the Small Business Administration announced it will no longer require up-front fees on loans valued at less than $150,000, which will save applying for loans under the limit between $1,500 and $3,000.
Applications for loans valued at more than $150,000 will continue to be assessed an up-front fee of 3 to 3.75 percent depending on the loan amount, Demirelli said.
Waiving the fee will not hinder the SBA’s ability to guarantee loans, Demirelli said.
Glacier Bank, which approved $8.7 million in SBA loans to 35 businesses, was the second-leading SBA lender in the district in 2013.
The leading SBA lender with an Idaho charter was Intermountain Community Bank, which includes Magic Valley Bank. Intermountain approved $5.7 million in SBA loans to nine businesses in the district.
Several national banks approved SBA-backed loans. Key Bank approved six loans totaling $2.58 million. U.S. Bank approved 22 loans worth a total of $713,200.
Some of the largest SBA-backed loans issued to Idaho businesses were approved by banks that don’t operate Idaho branches. One such bank — T Bank, National Association — approved two loans worth a combined $4.89 million.
BizCapital Bidco LLC approved a loan worth $3.75 million. Hanmi Bank approved a loan worth $1.8 million.
Zach Kyle: 377-6464, Twitter: @IDS_zachkyle