Small Business Finance News
SBA Recovery Act Funds Extended
Written by Jenna Weiner
The Senate voted to extend SBA Recovery Act funds.
The Senate recently voted to extend funding for vital SBA Recovery Act provisions through February 2010. The vote may come as good news to small business owners as Recovery Act funding has been running out, resulting in a waiting list of almost 1,000 small businesses for about $500 million in SBA-backed loans.
Senator May Landrieu, chair of the Senate Committee on Small Business and Entrepreneurship, requested the extension last month and is glad it has successfully passed. "Small businesses have been left in limbo since the funding ran out in late November," she said.
She believes this "action by the Senate will immediately clear the waiting list established by the SBA and will provide a lifeline to small businesses in need of credit."
The extended funds will enable the SBA to offer lenders higher guarantees for 7(a) loans and a fee waiver on 504 loans. Since the volume for 7(a) loans and 504 loans has drastically decreased since November, SBA officials hope this reduced cost of capital will boost SMB loan applications and lending.
"Reinstating these funds is important to small businesses and our overall economic recovery and job-creation efforts," said Landrieu. Indeed, the SBA reports that small businesses have generated 64 percent of jobs over the past 15 years.
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