SBA Recovery Act Fund is Extended by Senate

On March 2, President Obama signed legislation extending the SBA’s ability to provide small business loans enhanced by Recovery Act provisions, including the higher guarantee of SBA- backed loans and a waiver of loan fees.

This is the second time the Senate has approved additional funding since December.

How Is It Going To Work?

Additional funding will support about $1.8 billion in lending by extending its ability to guarantee loans. It will help new small businesses to jump-start and existing businesses to grow.

Existing borrowers who are already in SBA’s Recovery Loan Queue will be funded first, followed by the new applicants who are eligible for the higher guarantee and reduced fees.

According to SBA Administrator, Karen Mills, the increased guarantee and reduced fees on SBA loans helped put almost $22 billion into the hands of small business owners…As a result, average weekly loan approvals by SBA have climbed by 87 percent compared to the weekly average before passage of the Recovery Act.

The extension will provide higher guarantee for 7(a) loans through March 28, 2010. Reduced fees will be available until the additional funding is exhausted or the end of the fiscal year on September 30.

If you already took a 504 or 7(a) that is already funded, you will not be eligible for higher guarantee or waived fees.

More Support from SBA Is On the Way

SBA states that it will continue to provide small businesses with the tools they need to drive economic growth and grow jobs.

Karen Mills, reports: “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.”

For a detailed information regarding the new legislation, please read the press release (pdf document).