The Small Business Administration backed more loans in the fiscal year just ended than ever before, and the sum of money it provided for businesses topped $15 billion for the first time, SBA chief Hector Barreto recently announced. Though final fiscal-year numbers were not available at presstime, the administration had backed over 78,000 loans in only 11 months of its fiscal year, which ended September 30. The surge in activity is remarkable given that the SBA suspended the 7(a) program for a few weeks in January.

Evan Keefer, a spokesman for the SBA, suggested that the increase in lending has helped to fuel the 1.5 million jobs created by small and family-owned businesses this year.

But members of the lending industry, which manage SBA loans, were not as thrilled by the news. They note that the SBA achieved these records in part by reducing the size of the average loan by a third since 2002. Paul Merski, chief economist for the Independent Community Bankers of America, says the 5,000 lenders he represents want the SBA to focus less on processing what he calls "credit-card size" loans and more on larger loans that closely held firms often don't qualify for on their own.

Merski also says that banks are frustrated that the SBA has responded to congressional pressure to become self-sufficient by raising fees. "The 7(a) program continues to be a large success," Merski says, "but it hasn't been run as efficiently as it should be."

But "a large number of geographically diffused loans has good implications for overall economic optimism," says Peter Rodriguez, a University of Virginia economist. "Smaller loans," adds Keefer, "mean more people get touched by the program."