WASHINGTON — The Senate has temporarily extended funding for two stimulus provisions that reduced fees and boosted guarantees on Small Business Administration (SBA) loans, according to a Wall Street Journal report.
The original provisions had run out of funding in late November (see previous coverage here). The extension, which was included in the Defense Appropriations bill, restores the maximum guarantee on SBA loans to 90% and waives the fees that the agency normally charges banks.
The provisions are only extended through February; another piece of legislation — the Jobs for Main Street Act, which passed in the House earlier this month — would extend the provisions through next September.
The provisions were originally a part of the Recovery Act in February 2009. SBA Administrator Karen Mills called the increased guarantee and reduced fees “a powerful combination” that has directed $16.5 billion to small-business owners and brought more than 1,200 lenders back to SBA loan programs, according to the Wall Street Journal.
The Recovery Act provided $375 million to increase the guarantee on small-business loans and eliminate the fees charged to borrowers, but when the money was spent, the SBA created a waiting list for awarding the last dollars. This extension should move businesses out of the queue, SBA spokeswoman Hayley Matz told the Wall Street Journal. “As we get to the end of February, we will implement the queue again as a way of orderly winding down the process.”