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TowneBank named a top SBA lender

May 22, 2013

Reported in: Inside Business
Written by: Bill Cresenzo

The Small Business Administration named TowneBank one of Virginia's top lenders of SBA loans for fiscal year 2012.

The SBA named the Suffolk-based community bank its top community bank lender of SBA 504 loans for the year.

The bank approved 19 loans totaling $8.5 million for small businesses.

TowneBank will accept an award on June 24 at the Virginia Small Business Week Awards Luncheon at the Richmond Westin Hotel.

The 504 loans provide businesses long-term, fixed-rate financing for acquisition or renovation of land, buildings and equipment, said Jayne Armstrong, district director of the SBA's Richmond District office.

"Small business success depends on access to capital," Armstrong said.

Overall, the SBA and Virgina banks approved 515 loans totaling $202.9 million.

A typical 504 loan requires 10 percent of the cost of the project from the borrower, 40 percent through the SBA and 50 percent through a third-party lender, such as TowneBank.

"The advantages to the borrower are the low capital injection and fixed-rate financing for up to 20 years on the SBA portion of the loan," Armstrong said. "Since this is an economic development program, borrowers are required to create one job for every $65,000 of SBA financing."

Armstrong said during the past 10 years, the SBA has streamlined the lending process.

But, she said, there remains a "gross misperception in the Virginia small business community that SBA lending involves a lot of paperwork and a very long processing time."

In reality, she said, banks use their own applications and process them without any additional approval from the SBA.

"Most loans are turned around pretty quickly," she said.

"Small business lending is starting to pick up again. More and more banks are contacting us to request training with an interest in expanding their SBA lending. I am very encouraged about what I am seeing in the past two months. I have personally been contacted by four banks this week regarding their interest in increasing their SBA participation."

The other top Virginia lenders are:

* BB&T of Winston Salem, N.C., which is the top overall lender. The bank provided 72 SBA loans totaling $17.7 million.

* Stellar One Bank of Charlottesville, which is the top intermediate lender. It made 32 loans, worth $6.07 million.

* Citizens Bank & Trust Co. of Blackstone, the top community bank, with 11 loans worth $291,000.

* University of Virginia Community Credit Union of Charlottesville, which made 10 leans worth $1.1 million.

* Business Finance Group Inc. of Fairfax, the top certified development company. It provided small business with 48 504 loans, totaling $32.5 million.nib

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