SBA loan extension becomes law
WASHINGTON — President Barack Obama has signed legislation extending through April the U.S. Small Business Administration’s (SBA’s) ability to provide enhancements in its two largest small business loan programs. The enhancements, first made available under the American Recovery and Reinvestment Act, include a higher guarantee on some SBA-backed loans and fee relief.
The SBA estimates the $40 million extension will support about $1.4 billion in small business lending.
As part of the Recovery Act enacted Feb. 17, 2009, SBA received $730 million to help small businesses, including $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. The funds for these programs were exhausted Nov. 23, 2009, and an additional $125 million was provided in December. Those funds were exhausted in late Feb. 2010, and an additional $60 million was provided subsequently. That funding was exhausted March 26.
Under the new extension SBA may continue to waive loan fees and provide higher guarantee levels on 7(a) loans through April, 30, 2010, or until the funds provided under the bill are exhausted.
When the funds provided for March were exhausted, SBA reactivated the Recovery Loan Queue, as occurred in November and again in February, to cover the brief period of time before the funds from the extension become available, which should be within a few days.
Eligible small business loan applicants, in consultation with their lenders, may choose to be placed in the queue for possible approval of a Recovery Act loan when funding becomes available.
For non-Recovery Act 7(a) or 504 loans already funded during the Recovery Loan Queue period, this extension does not provide a retroactive guarantee or fee relief. Loans that were funded under non-Recovery Act terms cannot be canceled and resubmitted to take advantage of the Recovery Act extension provisions.
This extension does not affect other SBA Recovery Act programs, including the America’s Recovery Capital (ARC) loan program or the agency’s microloans. Recovery Act funding still remains available for both of those programs.
To sign up for Mississippi Business Daily Updates, click here.
3 Responses to “SBA loan extension becomes law”
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- Peavey's wellness program honored after workers drop 1,000 pounds
- Group, lesbian couples look to overturn state's ban on same-sex marriages
- Pickering lists concerns over Mississippi Adequate Education Program formula
- Watkins says JRA out to block him from Farish by repaying HUD $1.5M
- Mississippi Film Studios signs contract with New Orleans company
- State renews battle over water use with city of Memphis
- Mars Food expanding Delta plant; investing $31M and adding jobs
- DAVID DALLAS: You say “Obama”, I say “Ebola”
- Biloxi baseball project still alive but may be held for 2015