The U.S. Small Business Administration is wrapping up the year reporting a significant drop in both the number of loans made to Iowa businesses and the overall dollar amount approved.
Jayne Armstrong, district director of the SBA in Iowa, attributes the fall to two key elements — bounding interest rates, and the fact so much money was put out during the pandemic years through grants and forgivable loans.
Armstrong says, “There’s just not as much demand in the small business community, but also there’s been a little bit of tightening, particularly in different industry sectors.”
The number of SBA-guaranteed loan approvals made in Iowa during the past year reached 340, down from 466 loans last year, while the amount approved dropped from more than $242-million last year to $139-million this year. Armstrong notes, that $139-million figure is still a very significant amount of money that was pumped into start-up and expanding Iowa businesses.
“We’re here, we’re advocates. You’re going to have ups and downs and different cycles through different economic periods. You’re not going to increase your dollar volume every single year,” Armstrong says. “Sometimes, a $10,000 loan to one business means as much to one business as a $5 million loan does to another business.”
As a direct result of SBA loans, she says more than 1,600 jobs were created in Iowa and nearly 1,900 more were retained. Armstrong isn’t particularly worried about the year-end figures, as she says the SBA continues to play a critical role in helping Iowa small business owners access capital.
“It will get back on track,” Armstrong says. “We went through some ups and downs with the last recession between 2009 and 2013, so it’s just a cycle that will happen.”
Of the 340 loans approved in Iowa during the fiscal year, 208 of them went to new business start-ups or to finance changes in ownership, which are considered new businesses by the agency.