Loan volume grew dramatically at Nevada State Development Corp.
in its just-completed fiscal year as business owners continued to take advantage of low interest rates to buy their own real estate.
The Reno-based company, which makes Small Business Administration loans for real estate and equipment, closed 116 loans for $46.8 million in the federal fiscal year ended Sept.
30.
That's an increase of 66 percent in number of loans and an increase of 27 percent in dollar volume over the previous fiscal year, said President Bobbi Bennett.
Nevada State Development Corp., in fact, ranked 16th in number of loans among 262 corporations nationwide that handle what SBA calls its "504 loans" for fixed assets.
Bennett said the growth is largely attributable to low interest rates as the rate on SBA loans hovered around 6 percent most of the fiscal year.
That encouraged small business owners to buy real estate, rather than continue renting.
In many cases, Bennett said, borrowers who purchased their own buildings lowered their occupancy costs.
Additionally, small business borrowers were attracted by the possibility of building equity in real estate.
The SBA 504 loan package, which is used in combination with bank financing, typically can cover up to 90 percent of a building's value.
That, Bennett said, allows borrowers to preserve working capital.
Although the SBA 504 loans also are available to purchase equipment with a useful life of at least 10 years, Bennett said most of her company's business continued to be real estate lending.
About 30 percent of its lending last year was in the Reno area.
Las Vegas accounted for 64 percent, and rural areas accounted for the remainder.
