Welcome to our inaugural SBA and USDA Loan Market Outlook, an annual forecast of key market dynamics based on the best data available at the time of publication. As our strategic discussions with lenders naturally focus on the big picture of the SBA and USDA loan market and noteworthy trends we see unfolding in the year ahead, this report attempts to capture the same forward-looking, proactive view as a foundational tool. We invite your candid constructive criticism as we refine our outlook throughout the year.
Small businesses are the primary jobs engine of the U.S. economy — providing 66% of all net new jobs since the 1970s. The Small Business Administration helps small businesses drive a healthy economy through a number of initiatives — including the flagship 7(a) loan guaranty program — designed to encourage lenders to provide loans to small businesses that are often unable to secure financing with reasonable terms and conditions otherwise.
Four themes define the SBA and USDA lending market in 2016:
- SBA and USDA loan approvals at a record high
- Lender participants at the lowest level in eight years
- Recession expected in the next five years
- The imperative for comprehensive risk controls