New and enhanced SBA Loan Programs available for Small business
October 26, 2009 | Author: Pat Stephens

With the passage of the American Recover and Reinvestment Act (Recovery Act) the U.S. Small Business Administration (SBA) has enhanced all of our loan programs and have implemented new programs to get credit flowing again to help small businesses weather this economic storm and ultimately continue to grow and create jobs. First and foremost, we enhanced our top two loan programs – 7(a) and 504 – which have so far resulted in $6.2 billion in new loans for small businesses. The SBA temporarily eliminated all fees for borrowers on its 7(a) loans and for both borrowers and lenders on its 504 loans. The SBA also temporarily raised the guarantee on most of its 7(a) loans to 90 %, up from 75-85 percent. 7(a) loans can be used for most types of small business needs including working capital and 504 loans are for fixed asset financing only. Our maximum loan exposure to any one business is in most cases $1, 500, 000. In this short time, there has been a 40 percent increase in average weekly loan dollar volume compared to the weekly average before the passage of the Recovery Act. Lenders have responded positively to these program changes. From the signing of the Recovery Act on Feb17 to July 3 the SBA worked with 670 lenders that had not made an SBA loan since October 2009. Moreover of those, 330 had not made an SBA loan since at least 2007. This recovery capital is flowing to a broad base of small businesses: 25 percent to rural: 20 percent to minority-owned: 19 percent to women owned: and 9 percent to veteran owned. SBA launched the American’s Recovery Capital – ARC – loan program on March 16th. The ARC will provide a bridge for many small businesses to the better economic times ahead. This program provided loans of up to $35,000 to viable, but struggling small businesses to help them make debt payments. ARC loans are interest free to the borrower, deferred repayment loans, which are 100 percent guaranteed by the SBA. The SBA makes the interest payments to the lender. On July 1, SBA launched yet another new loan program, the Dealer Floor Plan Program, designed to help car dealers and other types of businesses that sell anything that is titled in Ohio. In the coming weeks we will announce other Recovery Act programs, including an expansion of our micro loan program, a loan that uses the 504 loan program to refinance debt and a guarantee program to stimulate sales of 504 first mortgage pools in the secondary market. American’s small businesses are the key to our nation’s economic recovery. The SBA is using every tool in our toolbox – and creating new ones when necessary – to help small businesses lead us out of these tough economic times. Fore More information on SBA guaranty loan programs contact the SBA Columbus District Office at 614-469-6860 or www.sba.gov/oh/columbus.