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Wells Fargo: 'We're Bullish on Small-Business Lending'

Stocks in this article: WFC

SAN FRANCISCO ( TheStreet) -- Wells Fargo (WFC) wants small-business owners to know they want your lending business.

In the past 12 months, Wells Fargo approved 3,176 loans worth $1.24 billion backed by the Small Business Administration, the most it (and any other bank, for that matter) has approved in one fiscal year in terms of volume and number of deals, the company announced Monday.

Even with the average loan size at $390,000, Wells Fargo wants small-business owners to know it is looking to do more lending with a range of business sizes and growth stages.

"We are all about making sure we cover small businesses," says Chris Ledesma, vice president of strategy for Wells Fargo's SBA lending division. He referred to a Northern California baby clothing start-up approved for a $91,000 line of credit as well as larger real estate transaction or business acquisition loans.

"We want to service every level of small business that we can," Ledesma says. "We're bullish on small-business lending."

The company has seen a steady increase in loan demand over the past year, driven by rent replacements and other real estate purchases, business acquisitions and expansion, it says. Wells Fargo approved $398 million in SBA loans during the September quarter, up from $299 million in the December 2011 quarter.

While the environment is still a challenging one, small-business owners are feeling more confident and optimistic and starting to take advantage of business opportunities. At the same time, overall credit quality among borrowers is improving, Ledesma says.

"Borrowers are starting to pick up," he says.

"They've had time to find their new normal. Their businesses and their cash flows are stabilizing," he says. "We're finding more creditworthy borrowers, and that's a good thing."

Overall SBA lending topped $30 billion in the 12 months ending Sept. 30 -- the second-largest dollar volume ever, the agency said this month. This year's amount was surpassed only by fiscal year 2011, which was boosted heavily by the loan incentives under the Small Business Jobs Act of 2010, the SBA said in an Oct. 9 release.

In total, 53,848 loans were approved to small businesses through the SBA's main loan programs -- 7(a) and 504 -- compared with 61,689 loans last year worth $30.5 billion and 60,771 loans in the 2010 fiscal year worth $22.6 billion.

"Reaching such strong numbers is a clear sign that both the business and lending communities are regaining their confidence in the economic climate of the country," SBA Administrator Karen Mills says. "It means that the credit markets are increasingly willing to help small businesses establish themselves, grow and create new jobs for Americans."

The SBA's incentives as well as streamlined processes and other loan program enhancements have resulted in nearly 1,300 lenders returning to SBA lending, opening up more points of capital access for small businesses, the agency said.

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