More small businesses in Indiana are turning to a federal loan program to help finance expansions—an encouraging sign the economy is beginning to improve.

Loans and loan amounts for such fixed assets as real estate and equipment are up significantly for two Indianapolis area groups that administer the loans.

The Indianapolis-based Indiana Statewide Certified Development Corp., the largest of five CDCs in the state, works with local lenders to provide loans from the U.S. Small Business Administration’s 504 loan program.

Through the first six months of the fiscal year beginning Oct. 1, Statewide CDC has approved more than $16 million in loans for 22 projects. The amount is more than double the amount approved in the same time frame of the previous fiscal year. It is also the third-highest dollar amount administered in the first six months of a fiscal year in the Statewide CDC’s 27-year history.

Federal lawmakers created the 504 loan program to give small business owners another option to obtain financing to fund expansions.

“The fact that we are approving more alternative loans is a signal that the SBA 504 loan program is more relevant than ever,” Jean Wojtowicz said in a prepared statement. “With 504 loans, the lenders can reduce their risk and provide their borrowers with affordable financing so they can grow.”

Since 1984, Statewide CDC has provided more than $344 million to 911 Indiana companies, which have created an estimated 26,000 jobs.

CDCs in Indiana are located in Fort Wayne, Portage and South Bend. Another is in Indianapolis: Premier Capital Corp.

Premier, through the first six months of the fiscal year, has helped provide more than $9.3 million in financing for 25 projects. The number of loans Premier has administered in the first six months of the fiscal year nearly matches the 29 it did for all of the previous fiscal year, Executive Director David Amick said.

“Nowhere in my wildest imaginations did I expect we would double our volume we did in 2009,” he said. “We’re seeing it across the entire state.”

Amick attributed the uptick in lending activity to small business owners who are beginning to spend cash reserves they accumulated while waiting for the recession to subside.