WASHINGTON — The $18 billion bill extending unemployment benefits recently passed in Congress and signed by President Obama adds $80 million in funding to two lending programs of the U.S. Small Business Administration (SBA), effectively extending Recovery loan provisions through May 31.
First made available under the American Recovery & Reinvestment Act, the enhancements include higher guarantees on some SBA-backed 7(a) loans and waives borrower fees on most 7(a) and 504 loans. The provisions have now been extended with new funding four times, and President Obama has called for the provisions to be extended through September 2010.
SBA reports that lending has increased significantly since the start of the fiscal year on Oct. 1, with 7(a) loans up 48%. Average weekly loan approvals jumped 86% compared to rates before passage of the Recovery Act.
"Thousands of small businesses across the country have taken advantage of these Recovery loan enhancements to get the capital they need during these tough economic times," SBA Administrator Karen Mills said last month. "The increased guarantee and reduced fees on SBA loans 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."
Under the extension, SBA can continue to waive loan fees and provide higher guarantee levels on 7(a) loans through May 31 or until the new funds are exhausted. Eligible applicants and their lenders can join the Recovery Loan Queue for possible loan approval as funding becomes available. For more information, visit www.sba.gov.