Small Business Administration (SBA) loans to businesses in the Washington, D.C., area fell 48 percent to 459 loans during the 2009 fiscal year, which ended Sept. 30, according to theĀ Washington Business Journal. SBA-backed lending was down 71 percent compared with fiscal 2007 levels.

During the past year, $132.6 million was loaned to local businesses through the SBA, which is 36 percent less than in 2008 and 52 percent less than in 2007. The decline occurred despite $730 million in federal initiatives to boost SBA programs.

During fall 2008, frozen secondary markets and fewer businesses seeking loans caused lending to slow significantly. The economic stimulus package led to SBA eliminating fees on its 7(a) and 504 loans and increased the maximum guarantee from 85 percent to 90 percent, allowing lending to rebound in the spring. Additionally, in June, the SBA began offering fully guaranteed bridge loans of up to $35,000 to businesses that have shown past success but need help paying bills in the short term.

However, even after those efforts, lending has not returned to normal levels. Two-thirds of the 85 lenders that made local SBA loans in 2008 pulled back in 2009, and 22 lenders stopped making local SBA loans entirely.

Still, other lenders are using the economic downturn as an opportunity to expand their loans. Business Finance Group, Fairfax, Va., the largest SBA lender in the Washington area, increased its lending 24 percent during the past year. Sally Robertson, president of Business Finance Group, says the organization saw a significant increase of borrowers who pursued loans before the Oct. 1 mandated 0.4 percent rate hike on all 504 loans was implemented. She says next year she will be watching for problems in the commercial real estate market as loans come due and many borrowers don’t have a way to refinance.

Bridget Bean, district director for the SBA’s Washington area office, says she expects 2010 will be a “blockbuster year” with increased lending and significant growth