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The Recovery Act: SBA Loans and Your Small Business

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The Recovery Act: SBA Loans and Your Small Business

By Caron_Beesley, Contributor
Published: August 18, 2010

Note: The ARRA (Recovery Act) initiatives and/or programs referenced in this article will expire on September 30, 2010. Any statements about qualifying time periods, or extensions of these dates, as they pertain to the availability of ARRA programs are over-ridden by the expiration of the Act on September 30, 2010.


During mid-March a flurry of announcements from the White House, U.S. Treasury, and the Small Business Administration (SBA) hailed the first measures being taken to address the economic challenges faced by small businesses and entrepreneurs across the country.

With access to credit and lending markets having practically dried up during the current economic crisis, small businesses, a sector that has created about 70 percent of all new jobs in the past decade, are now getting targeted help.

Here are some facts about what the American Recovery and Reinvestment Act (ARRA) means for small businesses at this point in time, as well as resources to help you find out more about how you can take advantage of the ARRA for your small business growth.

The Recovery Act and Small Business Loans

As a result of the Recovery Act, the SBA recently announced changes to its lending and investment programs that will make it easier and less expensive for more small businesses to get the financing they need.

The agency will receive $730 million in ARRA funds, the allocation of which is outlined on the SB;s Recovery Act Web portal here.

Specifically, small businesses can already benefit from two key provisions that were laid out in the Recovery Act - the temporary elimination of certain loan fees and the raising of guarantees on some 7(a) loans of up to 90 percent.

The elimination of loan fees, announced on March 16, will remain in effect until the end of the calendar year or until the funding is exhausted. The elimination of fees is retroactive to the day the Recovery Act was signed into law. (Note that the ARRA expires September 30, 2010, and will over-right any of these time periods or extensions).

SBA has published a Q&A about the new changes: Recovery Act Frequently Asked Questions for Small Business Owners.

Find Out how this Affects your Business

There are many events and seminars taking place in local business communities across the country to educate small business owners about these changes to SBA loan programs. These include:

  • In-Person Seminars

You can find out more by contacting your local SBA District Office, Small Business Development Center, Chamber of Commerce, or county government.

Many banks and lenders are also hosting sessions to help small businesses understand the implications of the Recovery Act on business financing.

Business.gov also regularly 'Twitters' about upcoming SBA-related seminars. Follow them @businessdotgov.

  • Web Events

There are also many online resources including the SB-s monthly Web chats, which invite questions from the small business community on topical matters.

  • Discussion Boards

You can also question industry experts and peers on what the Recovery Act means for small business on the business.gov Community message board dedicated to this topic here.

More details on the SB-s implementation of the Recovery Act funds will be coming over the next few weeks. Bookmark the SB's Recovery Act Web portal here for more updates.

Additional Resources

  • Recovery.gov - Read the ARRA, see how the money is being spent, and more.
  • Small Business Loans Guide from Business.gov - Information about the various small business loans available including loans for starting and expanding your business, disaster loans, export assistance loans, veteran and military community loans, and special purpose loans.
  • Loans and Grants Tool - Find loans and grants for your small business easily and quickly with this Loans and Grants Tool.

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

printuni Thanks for your comment. Have you tried posting your question on the Business.gov Loans and Grants discussion board there are many small business owners and experts who may be able to provide guidance. Caron
printuni Thanks for your comment. Have you tried posting your question on the Business.gov Loans and Grants discussion board there are many small business owners and experts who may be able to provide guidance. Caron
I have been writing to my Senators, Governor and President on the problems of owning a small business. I just need to be pointed in the right direction. I have done business with my bank for 25 years. Five years ago they were calling me offering loans. I am 2 months shy of the last payment(on time with every monthly payment) They also gave me a line of credit, which I have taken full use of. Now they want to refinance my existing loan with the line for a 10 year loan. I said I would like to pay the final 2 payments, refinance my line and add money to consolidate debt. They are holding my saving accounts as cross collateral until line is paid. The line and debt would be covered half with saving and I wanted to get an SBA for the other half. NO WAY.They just want their line paid off. Call SBA told to shop around for a different bank. Can't get saving for collateral for new bank until old bank line is paid--- old bank won't give loan. Does anyone know where I can get off this vicious merry go round?????
I have been writing to my Senators, Governor and President on the problems of owning a small business. I just need to be pointed in the right direction. I have done business with my bank for 25 years. Five years ago they were calling me offering loans. I am 2 months shy of the last payment(on time with every monthly payment) They also gave me a line of credit, which I have taken full use of. Now they want to refinance my existing loan with the line for a 10 year loan. I said I would like to pay the final 2 payments, refinance my line and add money to consolidate debt. They are holding my saving accounts as cross collateral until line is paid. The line and debt would be covered half with saving and I wanted to get an SBA for the other half. NO WAY.They just want their line paid off. Call SBA told to shop around for a different bank. Can't get saving for collateral for new bank until old bank line is paid--- old bank won't give loan. Does anyone know where I can get off this vicious merry go round?????
It is true that the there is always a risk that our business can go down and we won't be able to pay money. --------------------------------locksmithsMessage Edited by NicoleD on 10-26-2009 09:37 PM
Steve's points are very well put. While I appreciate that the President can spell SBA, the programs from Congress and the President are woefully ineffective up to now. The secondary market for SBA Loans are still slow moving and banks are in fear of making bad loans. The $35,000 emergency stabilization loan excludes most borrowers of SBA loans and has not even been defined as of yet. The lending crisis for small business will continue until we see bold and dramatic programs. Current SBA Loan holders need programs that are designed for them to refinance their debt so they can have the opportunity for long term success. The SBA is doing some good things in trying to help the current holders of SBA Loans who are struggling, but they could use a lot more help from the Administration. Neal GordonBusiness Borrowers Alliance
That is great news you guys, its great to hear where the money is going and how it can benefit business owners. Hopefully we hear more information regarding this soon in order to get a better definition, but I think this is a great program. AddisonPre-Settlement Funding Message Edited by NicoleD on 09-30-2009 11:32 AM
Wow, thanks for the detailed information. I'll be seeing if I can qualify for one of these SBA loans. Omer A.MMORPG Free Trials and RPG Music Site OwnerVG Alliance LLC (New Jersey)Message Edited by StuartR on 07-06-2009 12:41 PMMessage Edited by NicoleD on 09-30-2009 11:32 AM
Loan will help much to start small business but the only risk is if the business goes floap then we won't be able to pay money and we may loose our property also. But No pain no gain. So, this loan system for small business is really appriciated.RegardsNepali Forum Message Edited by NicoleD on 09-14-2009 05:15 PM
It is true that the there is always a risk that our business can go down and we won't be able to pay money. --------------------------------locksmithsMessage Edited by NicoleD on 10-26-2009 09:37 PM

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