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By Tom Latek
Kentucky Today
The U.S. Small Business Administration says loans for Fiscal Year 2024 totaled over $243 million in Kentucky, representing a 23.7 percent increase over the previous year, and marking the fourth consecutive year that more than $200 million was awarded in the state.
Kentucky had 819 approved SBA loans worth $243.5 million, which exceeded the average of about $211 million annually over the past decade by $32.5 million. The loans came from three loan program categories, known as 7(a), 504 and microloan loans.
The 7(a) Loan Program, SBA’s most frequently used loan program for both start-up and expanding small businesses, includes financing for small businesses with special requirements. Lenders include 74 banks and credit unions across Kentucky. There were 519 of the 7(a) loans, with a total amount of $217,112,600, by approved SBA lenders in Kentucky for Fiscal Year 2024. The average amount was $418,329.
The SBA 504 loan program provides long-term, fixed rate financing of up to $5 million for major fixed assets that promote business growth and job creation. The 504 loans are available through Certified Development Companies (CDCs), SBA’s community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA. There were 29 of the SBA 504 loans in Kentucky by seven CDCs, with a total value of $23,617,000. The average 504 loan was $814,379 in FY24.
The SBA Microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers for startup and expansion. SBA provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the Microloan program for eligible borrowers. There were 271 microloans, amounting to $2,7776,680, by six SBA-approved microlenders in Kentucky for FY24. The average amount was $10,246, and many of these loans were in underserved urban and rural communities across Kentucky.
The SBA ran out of funding on Oct. 15, due to Hurricanes Helene and Milton, as well as other natural disasters, but legislation passed by Congress and signed by President Biden shortly before Christmas Day, allowed the agency to resume issuing loans.
