Health care reform wasn’t the only legislation signed last week by President Obama. He also inked an extension – through April – of the U.S. Small Business Administration’s ability to provide enhancements to two programs aiding small businesses
According to a release from the SBA, the enhancements, which first appeared under the American Recovery and Reinvestment Act, include both a higher guarantee on some SBA-backed loans and reliedf from certain fees.
The agency estimates the $40 million extension will support about $1.4 billion in small business lending.
According to SBA Administrator Karen Mills, the parent program has so far ”helped put more than $23 billion into the hands of small business owners and brought more than 1,100 lenders back to SBA loan programs. 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.“
The original act became law on Feb. 17, 2009, when SBA received $730 million to help small businesses. This included $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 on Nov. 23, and an additional $125 million was provided in December. Those funds were spent by late February, 2010, and an additional $60 million was provided subsequently. That funding was exhausted late Friday.
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, according to the release.
For more information, visit www.sba.gov.