Shelby County led state with $42 million in SBA loans last year

The intrastate competition — OK, rivalry — between Memphis and Nashville is long held and covers a lot of territory and I don’t just mean the 200 or so miles separating Tennessee’s two largest cities.

That contest includes all manner of commerce and in recent years there’s been a fairly tight race for the lead in the total dollar amount of U.S. Small Business Administration loans distributed in each city, with Shelby County regularly coming out on top.

That was again the case last year, when Shelby County accounted for some $42 million in SBA-backed loans and earned the top ranking on Tennessee’s SBA list, followed by Davidson County with $32 million.

But an emerging growth spurt by Nashville’s small business community saw the Music City surpass the Bluff City in other areas, such as total number — rather than amount — of individual loans and in how the funds were used. In these categories, Nashville left Memphis in the dust.

The SBA operates its fiscal year from Oct. 1 to Sept. 30 each year and the Tennessee office wrapped up 2013 with 435 guaranteed loans totaling nearly $250 million. That’s up from 399 SBA-backed loans in 2012, but down in overall amount because the previous year’s loans totaled $255 million. Nationwide, the SBA guaranteed more than 54,000 loans totaling more than $23 billion in 2013.

Now back to Memphis and Nashville.

Shelby County’s $42 million in SBA loans last year was encouraging because it demonstrated that area lenders are making efforts to help local entrepreneurs keep their companies going and growing, said Walter Perry, Tennessee’s SBA district director. An issue for local merchants, though, is that most operators in Shelby County obtained SBA funds for operational costs instead of expansion projects. Of 61 SBA loans processed in Shelby County last year, only two were for capital improvements. These type of working capital loans typically range from $5,000 to $5 million.

By comparison, Nashville’s Davidson County saw 64 SBA loans in 2013 and one-fourth of those were for capital improvement projects.

“The increase in these loans last year is a positive sign that small businesses are being offered access to capital by lenders and that speaks well of the quality of applicants securing funds,” Perry said. “It’s important for companies to be able to get loans to meet payroll or use for inventory or pay bills, but we’d like to see more small businesses in Memphis that are growing and accessing loans to expand operations.”

Perry also offered some interesting statistics on Shelby County small business profiles and one that probably isn’t too surprising is that food is a big deal around here.

Of all the SBA-backed loans last year, nine went to local independent restaurants or food service companies. The next most popular category was the auto repair industry with five loans, tied with dental offices with five loans. Rounding out the top five most popular categories with three SBA loans each were retail shops and general contractors. Other small businesses in Shelby County that consistently receive SBA loans are car wash operations, day care facilities and fitness centers.

Perry said he hopes that even more small business folks will take advantage of the SBA loan services and business resources during 2014. There are lists of lenders available online at sba.gov/tn and myriad programming option are regularly offered free of charge in the Memphis metro area.

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Visit the SBA office in Memphis at 555 Beale or call (901) 523-9600.

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