Major Delays in SBA-Backed Loans Are Slowing the Recovery

SectorFinancial Markets
CountryMiddle east

Major Delays in SBA-Backed Loans Are Slowing the Recovery Businesses of all kinds are reporting a lag in approvals--and the consequences for the economy are dire. By Diana Ransom @dianaransom Getty Images The Coivd-19 pandemic hasn't been unkind to Stephen Schober's 35-year-old metal-supplies business. Several employees at Metal Supermarkets, which has 98 franchise locations in the United States, Canada, and the United Kingdom, did become ill but recovered; and the business itself was deemed essential, so it never had to close its doors. "We're expanding," says Schober, whose Mississauga, Ontario-based company has more than 500 employees across the system, which booked $117 million in global 2020 revenue, up from $110 million in 2019. "We're quite attractive now as a franchise opportunity because we are an essential business that's been growing sales, and we're profitable." But Schober has a problem: Six of his newest American franchisees are having difficulty getting financing. Lenders, he says, are now requiring more rigorous due diligence for loans backed by the U.S.

Small Business Administration --even though more...