*UPDATE* New Recovery Act Funding Extension for SBA Loans; What it Means for Your Small Business
by Caron_Beesley, Community Moderator
- Created: March 16, 2010, 7:52 am
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.
On March 26, President Obama once again signed legislation extending the availability of Recovery Act funds for certain Small Business Administration (SBA)-guaranteed loan programs.
This is the third time (and the second time this month) that 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 financing.
What the Funding Means
You can read more at the SBA's press center, but essentially the SBA estimates that the additional funding will support about $1.4 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 April 30) and a waiver of 7(a) and 504 loan fees normally paid by borrowers (through Sept or when funds are exhausted, whichever comes first). (Note that the ARRA expires September 30, 2010, and will over-right any of these time periods or extensions).
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 $23 billion into the hands of small business owner-As a result, average weekly loan approvals by SBA have climbed by 86 percent compared to the weekly average before passage of the Recovery Act-
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 SB'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 agenc'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
About the Author
Top Rated Articles
About This Blog
General small business tips and tricks.