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Banking & Finance

Live Oak Bank Tops Small Business Lending List, Again

By Audrey Elsberry, posted Nov 20, 2023
Live Oak Bank was the most active SBA 7(a) lender for the sixth year in-a-row, according to the Wilmington-based small business bank. (Photo by Audrey Elsberry)
Wilmington-based Live Oak Bank, announced Monday that it was the most active lender of SBA 7(a) loans for the sixth consecutive year, according to the U.S. Small Business Administration.
 
A 7(a) loan is the SBA’s primary business loan program. It can be used by small businesses for refinancing, acquiring or improving real estate buildings and can be short- or long-term working capital.
 
Live Oak Bank was the top lender by dollar amount during the SBA’s fiscal year, which ended Sept. 30. This means Live Oak lent the most money to small businesses through the SBA 7(a) loan program. Live Oak lent $1.8 billion, almost $50 million more than the runner-up, Huntington National Bank in Ohio, which lent $1.37 billion.
 
Live Oak approved 1,215 SBA 7(a) loans nationwide this fiscal year. The bank did not have the most loans nor the largest average loan size of the group, according to the SBA.
 
A standard 7(a) loan can range in amount from $500,001 to $5 million. Loans less than $500,000 are considered 7(a) small loans. Standard 7(a) loans typically have long repayment periods and low interest rates, according to Nerdwallet, features that have become increasingly coveted as interest rates hit historic heights this year.
 
This is possible because the SBA reimburses the lender for a portion of the loan in case the borrower defaults or cannot repay the loan, making it a less risky investment for the bank. In exchange, the SBA charges the lender a guarantee fee, which usually is passed on to the borrower. The fee is based on the size of the loan — the larger the loan, the larger the fee.
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