Small Business Development Corporation of Orange County Logs Record Year
It has been a banner fiscal year for the Santa Ana-headquartered Small Business Development Corporation of Orange County.
As of June 30, the organization had approved its greatest number of state loan guarantees in the organization’s 23-year history, a milestone whose impact is reflected in business owners’ abilities to achieve funding goals and growth. The development corporation, or SBDC-OC, jumped the amount of state loan guarantees it administered from $57.5 million in fiscal 2023 to $86.4 million in fiscal 2024, supporting total bank loans through its approved lenders that increased from $74.5 million in the prior fiscal year to nearly $131 million by June 30.
SBDC-OC is one of seven financial development corporations located around the state that operate under the umbrella of the California Infrastructure and Economic Development Bank, or IBank. The corporations administer the state’s Small Business Loan Guarantee Program as well as a federally funded State Small Business Credit Initiative program under IBank. Monies aid eligible small businesses and nonprofits, particularly those operating outside of the economic mainstream, toward creating funding equity and bolstering the economy.
Of the seven development corporations, SBDC-OC also took the top spot during fiscal 2023-2024 for the total amount of approved guarantees and total amount of financing provided by its pool of lenders in the guarantee program.
The loan guarantee is IBank’s longstanding flagship program out of many and offers guarantees, or collateral, of 80% up to $5 million on loans, lines of credit and other desired capital. Currently, 33 lenders are approved to participate in the loan guarantee program through SBDC-OC and are listed on its website. They were drawn into the program through connections with SBDC-OC’s leadership.
“I have personally or professionally known almost all the new participating lenders for many, many decades,” said Jim Ely, the corporation’s president who completed his first year in the leadership post and who also operates a longstanding business offering U.S. Small Business Administration loan services. “They all knew me as an SBA [Small Business Administration] guy, and when they heard that I was now working with another government-guaranteed lending program, they were immediately interested,” he said. “Presenting SSBCI and SBLGP guarantees as an alternative to SBA guarantees resonated well with these lenders.”
Seven lenders who were approved to participate in the state guarantee program through SBDC-OC during the past fiscal year generated roughly $37 million in new loans that were supported by state guarantees. Overall loan volume increased by $56,348,304. “That means our existing lenders contributed roughly $20 million, which is a 26% increase over the prior year,” Ely said.
Banks with at least a 3-star BauerFinancial rating are automatically eligible to participate in the loan guarantee program through SBDC-OC and are required to fill out a simple form to enroll.
Going forward, SBDC-OC plans to improve the credit quality of its portfolio by increasing emphasis on a business’ demonstrated repayment ability, which means that historical operating results should reflect more than adequate cash flow to repay the loan, said Ely.
Looking back over his first year in the president’s role, Ely reflected on the reasons for taking the post and his desires for the company going forward. “I took this job not because I needed a job,” he said. “I took it because I thought it would be fun. Our website address and email footers all reflect ‘sbfdoc.’ I want it to mean ‘Should Be Fun Doing Our Credit.’”
Michael Ocasio, SBDC-OC’s chief executive officer and a founding member of the corporation, which was established in 2001, grew its stable of programs, participating lenders, board and staff members over the years. “I couldn’t be prouder of Jim and our team of talented and dedicated people who work so hard to ensure that our state’s small businesses, entrepreneurs and nonprofits have access to the capital they need,” he said. “We are celebrating our team’s accomplishments over the past fiscal year, but mostly we are celebrating the success of the business owners we’ve supported who can now move their ventures forward and positively impact the state’s economy, which benefits us all.”