Stimulus Bill Pumps 730 Million Into SBA to Help Small Businesses Cope

For small business owners who believe they were ignored in the new stimulus bill (Recovery and Reinvestment Act of 2009), think again. As the debate continues to unravel as to "who gets what and when is enough," one thing is certain: there is more money coming in the direction of small businesses across the U.S. Small Business Administration (SBA). Remember that this is the body responsible for promotion, licensing, and enforcement of, you guessed it, money in the pockets of small businesses. This is done through licensed private lenders who have agreed to join the SBA program. In other words, if your local community bank has a commercial loan department, may well have a department of the SBA makes these loans. They are called SBA loans because the federal government reimburse a certain percentage, nonperforming loans, which gives an incentive for private banks to lend more money. Net effect - more loans available to small businesses. This article is a lifelong (20 total) on the subject: Help. Is there someone there lending to small businesses already?

Before talking about how much money is available for most of the SBA under the stimulus package, let's look at the current state of a software popular SBA loan. There is a loan program out there and SBA lenders are actually lending at present: the Community Express Loan Program. This gives small business unsecured loans of between $ 5,000 and $ 50,000 with very little paper, the answers usually within two days, the interest rates currently at 7.75%, financing and two weeks, and money cable directly to your business account. There are still lenders who participate in this program, although Congress has failed to make the program permanent and still has a ceiling of 10% in the number of loans.
Enter the stimulus bill Obama. Let's see how this program affects loans to small businesses as a whole.

So we should be excited about the stimulus package? Is not it too common on a new spending bill for a government agency to get more funds? Unlike the SBA. During the administration of the Bush administration, which could easily have changed the name of the agency ISBA (Ignore Small Business Association). As they were doing "sounds good press statements on how they were helping small businesses, they were trying to dismantle the arrogance, or when they were in a better mood, reduction of the budget.

The point is we have a new government that really likes small businesses. Remember these are additional monies above the current budget for the SBA. As we all know, budgets are determined in about March of each year (assuming that Congress has the grace of understanding) to be used for next year. The SBA has received its budget. This is the whipped cream placed on top of the cake of small business.

And we're not talking about token amounts here. That's how the additional money is distributed:

1. 375 million for the fee reduction or temporary elimination of the SBA loans and increasing loan guarantees from the SBA, up to 90% for some loans. Translation: When a borrower obtains a loan from the SBA to pay a loan guarantee fee SBA, going to Washington and used as war booty to pay the banks if there is a defect. This guarantee fee, depending on the loan, is currently between 50% and 85%. There is the possibility that some loan programs now can be increased to a 90% for her. If a borrower fails to pay these fees, the money has to come from somewhere, and here is taxpayers' money that is subsidizing the fees.

2. 255 million for a new loan program to help small businesses meet the payments of existing debt. Translation. You have a loan secured by fixed assets or real estate and want to refinance, whether to reduce payments or to put more money in their pockets for expansion.

3. 30 million for the expansion of Micro Loan Program SBA with $ 6 million to help fund new loans and $ 24 million for technical assistance grants to lenders Micro. . Translation: Under the microloan program, it is necessary to block the federal government to borrow money from micro lenders reloan then that, at higher rates, to communities and small businesses deserve and general security.

4. 20 million for streamlining the SBA loans and the monitoring process, with new technology. Translation: The process of rationalization will make it faster and more efficient to process loans and supervision is to monitor SBA lenders license - make sure they are acting on behalf of small businesses and comply with program guidelines.

5. 15 million for the expansion of the SBA guarantee bond guarantee program. Translation: If you are a construction contractor and have to get a performance or payment bonds in a project that requires substantial resources to ensure the security. This will help you get your hands on the necessary link and be able to secure the contract.

6. 25 million for staffing and new programs.

7. 20 million for the Office of Inspector General. Translation: To inspect and audit lenders licensed by the SBA.

Although one could argue that this new law is "too little, too late", we must give our current administration the opportunity to do good things with this new money. And do not forget the mentality that the SBA lender. Although not as wildly quixotic as stock market speculators, their bags are opened and closed based on the mood of the country. We want to be as comfortable as possible when we walk toward them for money.