SBA proposes new regulations
WASHINGTON — The U.S. Small Business Administration (SBA) announced proposals aimed at strengthening opportunities for disadvantaged small businesses to benefit from its 8(a) Business Development program.
The proposed 8(a) regulation changes are the result of the first comprehensive review of the 8(a) program in a number of years and were published in the “Federal Register.” The rules cover a variety of areas of the program, ranging from providing further clarification on determining economic disadvantage to requirements on Joint Ventures and the Mentor-Protégé program. The public comment period on the proposed changes is open for 60 days.
The 8(a) program is a nine-year business development program for small businesses that fit the SBA’s criteria of being socially and economically disadvantaged.
In a separate item, regulations published by the SBA will create a secondary market guarantee program to provide greater liquidity for lenders and expand access to capital for small businesses.
Funded through the American Recovery and Reinvestment Act, the new program would encourage sales into the secondary market of the “first mortgage” portion of small business financing made possible through the SBA’s 504 Certified Development Company (CDC) program. As a result of the economic recession and the disruption in the credit markets, there has been a significant decline in secondary market activity for 504 first mortgage loans.
Under the new program, portions of eligible 504 first mortgages pooled by originators or broker dealers could be sold with an SBA guarantee to third-party investors in the secondary market. Lenders will retain at least 15 percent of each individual loan, pool originators will assume 5 percent of the risk, and the SBA will guarantee the remaining 80 percent. To be eligible to be included in a pool, the first mortgage must be associated with a 504 loan disbursed on or after Feb. 17, 2009. The program will be in place until Feb. 16, 2011, or until $3 billion in new pools are created, whichever occurs first.
SBA will begin accepting applications to become a pool originator from banks and broker dealers immediately, and expects to be operational for the settlement of pools in about 60 days.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- WILLOUGHBY: Bernie Reed cites hard work as key to success of Reed’s Metals
- Half century of memories — Christmas on Deer Creek to celebrate 50th anniversary
- Analyst: KiOR Columbus plant may end up sold as scrap
- (UPDATE) Gov. Bryant: $1.2 billion aluminum plant is a very exciting proposition for the state of Mississippi
- Ex-MDEQ leader Fisher joins Butler Snow
- Former MDEQ Executive Director Trudy Fisher joins Butler Snow
- Federal appeals court: State's abortion law is unconstitutional
- Can Metrocenter rise from the ashes? Again
- Gulf oil rig explosion kills one worker, injures three
- Prescott leads field for Conerly Trophy as state's best football player