Additional Stimulus Funds and New Lenders for SBA's Microloan Program

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.

Several months ago, we posted a Quick Guide to Microloans. The article detailed the Small Business Administration's Microloan Program, the agency's answer to financing shortages that face the small businesses community. Designed to provide small amounts of capital to as many businesses as possible, the Microloan program has drawn much attention for its success and has been deemed critically important to the well-being of small businesses today.

As such, on August 19^th SBA issued a press release announcing the addition of funding to the Microloan Program through the American Recovery and Reinvestment Act (ARRA, also known as the economic stimulus package).

The Microloan Program will receive an additional $50 million dedicated to loans and $24 million for technical assistance. These funds will sustain the program, since exhausting the $40 million in loans and technical assistance provided to it by the regular FY 2009 appropriations.

In addition to revitalizing their ability to provide capital for small businesses, SBA is focusing on adding new lenders to the program. Unlike other financing programs' strict application and approval criteria, the main problem that business owners encountered when applying for microloans was that their business operated in areas not served by an approved microlender. The additional funding has enabled the Microloan program to expand its reach with the approval of eight new microlenders.

• Montpellier, Vermont - Vermont Community Loan Fund, Inc.
• Saint Paul, Minnesota - Neighborhood Development Center
• Austin, Texas - CenTex Certified Development Corp.
• Tallahassee, Florida - The Emperor Organization
• Staunton, Virginia - Staunton Creative Community Fund, Inc.
• Eugene, Ohio - Lane MicroBusiness (d.b.a. Dev)
• Philadelphia, Pennsylvania - FINANTA (American Street Financial Ser.)
• New York, New York - Accion USA, Inc.

The program has also approved 15 new loans totaling over $10 million that will be disbursed in the near future. For more information on the microloan program, contact a local microlender.