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Top Loan Program Expanded Further
By Marc Tracy
Starting next week, reports The New Entrepreneur, a business can have annual revenue as high as $8.5 million and federal income taxes as high (for the previous two fiscal years) as $3 million in order to be eligible for the Small Business Administration's flagship 7(a) loan program. It's the only measure required by the stimulus package designed to increase the availability and power of SBA-backed loans, all of which are set to expire in the fall of 2010, that hasn't been implemented yet.
And, actually, there is some evidence that those expansions that have already been implemented--chiefly, the temporary elimination of fees and the increase in the amount of a loan backed by the SBA--are having the effect of increasing the program's use. In fact, according to Independent Street, weekly loan volume in March was up a whopping 25% since the stimulus's $730 million for these extra features became available. SBA Head Karen G. Mills testified that the main cause of the uptick is actually that more lenders are participating in the program.
Which does leave us wondering just whom this is helping most: small businesses, or banks? And yes, credit isn't everything. And even within the realm of credit, SBA credit isn't everything. Still, we'd say all this ultimately counts as good news. May the stimulusing continue!
Comments (0)May 20, 2009 11:55 AM
