Live Oak Bank, a Wilmington-based financial institution, has been named the most active lender of SBA 7(a) loans for the sixth consecutive year, according to the U.S. Small Business Administration. This announcement was made on Monday, highlighting Live Oak’s continued commitment to supporting small businesses through access to capital.
A 7(a) loan is the primary business loan program offered by the SBA and can be used by small businesses for various purposes such as refinancing, acquiring or improving real estate buildings, and short- or long-term working capital. During the SBA’s fiscal year, which ended on September 30th, Live Oak was the top lender in terms of dollar amount having lent $1.8 billion to small businesses through this program. This represents an increase of almost $50 million over the runner-up, Huntington National Bank in Ohio which lent $1.37 billion during the same period.
Despite being the top lender in terms of dollar amount and average loan size according to the SBA, Live Oak did not have the most loans nor largest average loan size in their group during this fiscal year. The bank approved 1,215 SBA 7(a) loans nationwide but other banks had more loans with larger average loan sizes.
One reason why these loans are increasingly popular is that they offer long repayment periods and low interest rates that have become even more attractive as interest rates hit historic heights this year. Additionally, because the SBA reimburses a portion of these loans in case of default or repayment issues, it makes them a less risky investment for banks compared to traditional business loans without this type of guarantee from a government agency like