Some small banks are also selling their loans to big banks, said Brendan Ross, president and portfolio manager at Direct Lending Investments, a private investment firm in Los Angeles that owns notes on loans made by alternative lenders.
"The [small] banks can't afford to warehouse them," said Ross. "They are like glorified brokers."
"It does allow us to recycle those dollars back out," said Eric Petersen, executive vice president of corporate development at Celtic Bank. "It allows an institution like ours to make a lot more loans than we would be able to."
Celtic Bank sells most of the loans it originates on the secondary market but remains the primary contact for servicing them, Calafati said.
Party like it's 2009?
How long small banks will have an appetite for SBA lending likely depends on the health of the secondary market, which stalled in 2009. "There were problems during the recession in the secondary market, but it has come back," said Bob Coleman, editor of the "Coleman Report," a trade newsletter for small-business bankers. "It is a very profitable lending product for some of these smaller lenders. If they do it right, they can make some money in it."
Banks aren't the only place to get SBA loans. They are also available through nonbank lenders and credit unions.
Nicole Zinn, owner of Rocket Electrics, an electric-bike shop in Austin, Texas, won an SBA-backed loan for $180,000 from Austin-based Amplify Federal Credit Union after working with an advisor at the Texas State Small Business Development Center to revise the shop's business plan and put the loan application package together.
Zinn founded the business in 2011 after losing her job in high-tech marketing during a corporate restructuring; it became profitable four months after it opened. "I didn't want to go back to a cubicle," she said.
Zinn applied for a loan to expand her inventory in July 2013, then saw her application stall during the federal government shutdown in October 2013. Finally, in November 2013, after the government reopened, Zinn won the loan, which she was more than ready to put to use in expanding the business.
"When the loan process takes so long, your need grows," she said.
—By Elaine Pofeldt, Special to CNBC.com
(For more on the banks leading in lending under the SBA's 504 program—loans for fixed assets, including real estate and equipment—consult the charts on the following page.)