On March 2, President Obama signed legislation extending the
availability of Recovery Act funds for certain Small Business
Administration (SBA)-guaranteed loan programs.
This is the second time the U.S. Senate has approved additional
funding for economic stimulus provisions related to SBA-guaranteed loans
and is good news for small businesses seeking start-up and growth
What the Funding Means
You can read more in this press release, but essentially the
SBA estimates that the additional funding will support about $1.8
billion in lending by extending its ability to guarantee loans enhanced
by Recovery Act provisions. These include higher guarantees on SBA 7(a) loans (90 percent compared
with the normal 70 percent through March 28) and a waiver of 7(a) and
504 loan fees normally paid by borrowers (through Sept or when funds are
exhausted, whichever comes first).
These provisions have already proved successful in stimulating small
business lending as SBA Administrator, Karen Mills reports: “The
increased guarantee and reduced fees on SBA loans helped put almost $22
billion into the hands of small business owners…As a result, average
weekly loan approvals by SBA have climbed by 87 percent compared to the
weekly average before passage of the Recovery Act.”
Read “The Recovery Act: SBA Loans and Your
Small Business” for more facts about what the provisions of the Act
mean for small business.
Managing the Back-Log – The Recovery Funding Queue
Small business owners who have already applied for Recovery Act loan
programs will likely find themselves in the Queue. This was instituted
by the SBA in February 2010 to better manage the application process for
these high demand and quickly depleting funds.
With the announcement of the availability of additional funds, the
SBA will prioritize loan approvals for borrowers who are already in its
Recovery Loan Queue, followed by new loan applications.
If you already have conditional loan approval you should have
received a loan application number which you can use to track your
position in the queue here.
The Future for Small Business Lending
The SBA remains confident that it will continue to see buoyancy in
small business borrowing: “Through ARRA we brought nearly 1,100
lending institutions back to the SBA’s programs that had not made an SBA
loan since at least 2007,” said Administrator Karen Mills.
And with the newly announced funding extension, Mills re-stated the
agency’s pledge to provide small businesses with the tools needed to
drive economic growth and grow jobs: “We will continue working with
the President and with Congress to move forward with proposals for a
longer extension for these important program enhancements, as well as
higher loan limits, refinancing for commercial property loans and other
significant ongoing support for small businesses.”
- Small Business Loans and Grants – This guide from
Business.gov includes information and tools to help small businesses
find and apply for loans and grants, including SBA-guaranteed loans.
- Tips for Getting Your Small Business
Loan Request Approved (Even in Today’s Economy)
- Managing Small Business Debt –
Government Loans and Refinancing Lifelines
- SBA Small Business Loans
Explained – Availability, Eligibility and the Application Process
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