In FY2003, nearly 5,590 loans worth $718.35 million were made to Hispanics through the Small Business Administration's 7(a) program. But while the number of loans increased 42.29 percent, the overall amount of those loans actually decreased 4.88 percent.
Raul Cisneros, an assistant administrator at the SBA, says the decrease reflects the SBA's efforts to make smaller loans within the program, focusing SBA resources on smaller companies that most need help.
Overall, the SBA's 7(a) program made more than 67,000 loans last year, worth $11.26 billion; Hispanics garnered 6.38 percent of that amount.
The geographic distribution of Hispanic recipients of 7(a) loans naturally follows the dispersion of the U.S. Hispanic population. So it's no surprise that the 10 states with the largest Hispanic populations also are the top states for 7(a) loans to Hispanics.
Hispanic companies in California received 1,324 loans in FY 2003, for a value of $186.7 million; Hispanic companies in Texas received 785 loans, with a total value of $99.7 million; in Florida, Hispanic companies received 931 loans valued at a total of $89.3 million.
The SBA program also has come under fire in 2004. Earlier this year, the SBA suspended the program because, due to record demand, it had run out of money to support the government-guaranteed loans.
The program resumed again after receiving an additional $470 million in lending authority, but remains in a precarious position pending approval of its appropriations bill.
The SBA also began capping the amount available to each borrower at $750,000, down from $2 million.
The SBA said that when it receives its full appropriation it expects to keep the 7(a) program running without interruption.
Some have blamed the SBA for the funding problems, saying the agency has underestimated the amount of appropriations it has asked Congress for each year. But others note it appears to be a wider problem.
Congresswoman Nydia M. Velazquez, D-N.Y. and ranking member of the House Small Business Committee, in February said the SBA's FY2005 budget plan submitted by the administration was "totally inadequate."
The budget proposal is for $700 million, down from $1 billion in 2001.
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