SBA Stimulus Funding Extended Through February
Small businesses can breathe a sigh of relief — a much needed influx of funding to the SBA’s watershed recovery program is on the way.
Congress agreed last month to extend funding for the SBA Recovery Act through February. Part of the Obama administration’s massive economic stimulus plan, the legislation boosted funding to the agency’s two most popular loan programs. The measure met with incredible demand — small business owners grabbed about $375 million in stimulus funding, creating a shortage in capital that threatened to send loan volumes plummeting.
But legislators decided to keep the money flowing, at least for another month or so. About 1,000 small businesses were on a waiting list for close to $500 million in SBA loans.
“Small businesses have been left in limbo since the funding ran out in late November. Today’s 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,” said U.S. Sen. Mary L. Landrieu, D-La., chairwoman of the Senate Committee on Small Business and Entrepreneurship. “With these additional funds, SBA will be able to offer lenders a higher guarantee for 7(a) loans and a fee waiver on 504 loans, and reduce the cost of capital for small businesses by waiving the fees on both 7(a) and 504 loans. Reinstating these funds is important to small businesses and our overall economic recovery and job-creation efforts.”
Meanwhile, increases to the SBA’s Surety Bond Guarantee Program will extend through September. The agency is guaranteeing bonds to smaller contractors on projects worth up to $5 million — and in rare cases on public projects valued up to $10 million.
The bond guarantee covers four types of contract bonds: Bid Bonds, Payment Bonds, Performance Bonds and Ancillary Bonds. Small contractors can learn more by visiting the SBA’s Office of Surety Guarantees (OSG).