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From the Houston Business Journal

The Makeup of Houston’s SBA Loans

Houston small businesses are coming off of a record-setting year for SBA loans. More than $800 million in SBA loans were issued to Houston small businesses in fiscal year 2015, compared to $688 million in loans in FY14. Of the 1,576 total SBA loans, 1,518 loans were issued as 7(a) SBA loans, which cater to startups and growing small businesses. The remaining 58 were issued as 504 loans, which are mostly used to purchase real estate or buildings.

Jerry Tarnopol serves as senior vice president of SBA loans at Houston-based Integrity Bank SSB, which issued out $24.34 million in 7(a) SBA loans to Houston small businesses in FY15. Within the Houston market, Tarnopol said that most banks aren’t issuing out a ton of SBA or conventional loans to energy companies, which parallels with the loan stoppage that residential real estate experienced in 2008, just before the massive U.S. economic meltdown. He also shared what the makeup of Houston’s SBA space looks like, and what kind of changes we can anticipate in 2016.

What kind of SBA recipients are you seeing in Houston?

I’ve seen a lot more brewpubs. We’ve done a lot of restaurants and hotels – hotels seem to be growing again. There aren’t a lot of banks that are doing (energy loans), even under the SBA flag. … I’m sure some of these layoffs are starting to happen, and I’m sure you’re going to see people take these IRA dollars and use them for business startups (in 2016).

I think with the economy getting into a downturn and everyone anticipating that based on the oil industry, you’re going to see more SBA loans.

Are there any clear downsides to a bank issuing an SBA loan?

There’s a lot of red tape. I mean, you’ve have to make sure your file is documented properly, and there’s more documentation involved in a SBA loan than a conventional loan. … In Houston, there’s probably more people looking for SBA loans than before. We’ve done a good job as bankers to create this program into a bigger program. In Houston, there’s more lenders doing SBA loans that there was 10 years ago. And there’s more volume coming out of the top lenders than there was 10 years ago.

How does your role in the SBA space impact Houston?

It creates jobs. People are opening up businesses and they’re creating jobs. Every one of these businesses that opens up create jobs. If I look at all of the downturns in the economy, SBA does really well in those times, because you have people taking their retirement accounts and either buying existing businesses, or getting into a franchise or starting a business.