BANKING/FINANCE

While more than three dozen banks based in Orange County say they target small businesses, it was a savings and loan that became the county’s first “preferred lender” under a program created by the U.S. Small Business Administration.

Mercury Savings & Loan in Huntington Beach joins only five other preferred lenders in the Greater Los Angeles area, the SBA said in announcing its newest participant in the program.

The SBA guarantees 85% of business loans--up to a maximum of $500,000 per loan--made by banks and S&Ls.; Typically, the agency must review credit reports and other documents for each loan before making its guarantee. The process can take six to eight weeks, said William Cyril, a Mercury senior vice president and head of its banking division.

As a preferred lender, Mercury can make those loans in half the time because the SBA no longer will review the documents on a loan-by-loan basis, Cyril said.

S&Ls;, typically the place to shop for home mortgages, have been allowed to make business loans for equipment, inventory and other business needs since federal deregulation in 1982.

Mercury started making its business loans about 3 1/2 years ago, Cyril said, and has become the biggest SBA lender in the savings industry with a portfolio of 250 loans totaling $70 million. Its average business loan is about $300,000.

Mercury is the nation’s ninth largest SBA lender in the number of loans made last year and the fifth largest in dollar volume, Cyril said.