Status of SBA Stimulus Programs
There have been a lot of media reports lately about the SBA and its lending programs. Two stimulus packages and a new plan by President Obama’s Administration to increase lending to small business have all happened in the last 18 months.
With all the changes it can get very confusing and hard to keep up to date.
I’ll do my best to give an overview of what’s happening and available for the small business owner. First, if you want to obtain a SBA loan there are programs that don’t require mountains of paperwork. If you are looking for loan sizes greater than $50,000 you will be subject to paperwork. However, if you apply for the community express or micro loan the amount of paperwork isn’t as daunting.
The SBA 7(a) has several programs including the community express and micro loan. These programs are easier for small businesses to apply and qualify for. Even if you are a start-up you may still have a chance at obtaining one of these loans. You still need a good personal credit score to get approved, most of the time better than a 680.
The current status of the SBA stimulus programs:
- Increase the 7(a) loan limit from $2 million to $5 million
- Increase the 7(a) loan guaranty to a maximum of $4.5 million (90%)
- Increase the SBA 405 loan limit from $1.5 million to $5.5 million
- Allow the 405 loan program to refinance short-term commercial real estate loans
- Extend stimulus one to 90% 7(a) guaranty and waive borrower fees through December 2010
- Increase the loan limit on microloans from $35,000 to $50,000
- Allow 7(a) loans to be sold to the secondary market in $500,000 increments
The Obama administration’s small business plan calls for $30 billion to be taken from the $787 billion TARP program and infused in the SBA loan programs. The intent is to increase the lending to small business.
With all the changes and additional provisions my hope is that banks will want to lend more. If the government is backing 90% of the 7(a) loans now I can’t see why banks would be afraid of lending these types of programs. Especially when not too long ago they were offering ridiculous mortgages at 100% of the value of the home while prices were dropping.
If you have any experiences in obtaining SBA loans let us know in the comments section below and provide feedback on any lenders or programs you applied for. We would love to share your stories.
David Gass
Founder, Business Credit Services, Inc. &
Earn.com Expert Advisor
Tags: sba, SBA loan program, small business lending, stimulus programs
January 14th, 2010 at 10:32 am
I have tried on at least 3 occasions to get SBA loans for my business both here in Colorado and in Louisiana with no results. I even went to a micro loan meeting also with no results. I never recieved any return communications from SBA in reference to obtaining a loan, only communications wanting me to spend money with them for different types of classes or seminars. The SBA to me has been a complete waste of my time and money.
January 23rd, 2010 at 2:20 pm
I have to agree with Tim. SBA does not lend the money, they want you to take valuable time away from your business to walk the halls of their offices, from room to room, listening to every one of them spewing double talk. I went to a local lender they kept me in suspense for 2 weeks and then said I did not MAKE enough money to be considered for ANY of the SBA programs. Well that was a shot in the foot, but no surprise. What fledgling business does in the first 3 years? So, here I am working on the capital that I generate each month and a couple of credit cards,Catch 22 there.
The folks WITH money are the ones that get the money. It happens all the time and everywhere!
February 2nd, 2010 at 9:50 am
I am a start-up seeking capital, have any of you obtained financing for your business?
February 4th, 2010 at 10:16 pm
What can a start-up entrepreneur with bad personal credit do to get a small amount of capital for a low-overhead business?
February 11th, 2010 at 8:43 pm
I am tying to work through the hassles and tedious attention of wrting a very detailed and meticulous business plan – I need approximately 75 to 100k and can only pray because I have the location picked out, the idea is action and want to start making some money from summer camps. I want to cater to anyone and want to be able to sponsor a few kids in need but need the money to do that. I hope some if these billions are there for me considering I lost my job 5 years ago and have yet to recover financially. Whoever said the money is there for the rich was on the money.