North Bay Business Journal

Thursday, September 23, 2010, 4:34 pm

House passes SBA lending bill


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    NORTH BAY – The House passed HR 5297 today, the small business lending bill that once made into law will greatly increase the reach of Small Business Administration loans.

    Last week, the Senate passed the bill, and now it needs to go to the president.

    The bill creates a $30 billion lending fund for community banks. The bill would extend the fee reductions for SBA 7(a) and 504 loans and increase the guarantee to 90 percent through Dec. 31, or until $505 million in appropriations has been contracted.

    There will be a permanent increase to the size of the loans, $5 million for both 7(a) and 504, and a temporary increase of $1 million for express loans.

    “The impact this will have on small businesses in Northern California gaining access to capital is significant. This bill is also a huge boost for community banks who participate in the SBA 7(a) and 504 program,” said Michael Rice, senior vice president of small business lending at Circle Bank in Novato when the senate passed the bill last week.

    Circle Bank president and Chief Executive Officer Kim Kaselionis is one of three representatives from California on the American Bankers Association’s Community Banking Council, which represents the nation’s 7,000 local banks.

    She is pleased that the bill has passed, but needs to see the specific conditions related to how banks can access the funds and what it will mean if a bank accepts the money.

    The bill also includes alternative size standard for businesses, which establishes a standard of maximum tangible net worth of $15 million and 2-year average net income after Federal income tax of $5 million. This applies to both 7(a) and 504 loans.

    For business owners in need of debt refinancing, this will establish a temporary 2-year program of business debt refinancing through the 504 program independent of the usually required job creation/preservation project.

    Mark Quinn, district director of the SBA in San Francisco, said a lot of short-term debt is coming up, and this will be a way to take out the short-term financing

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    1 Comment

    1. September 29, 2010, 7:19 pm

      by Victor L Perez

      Small businesses that have been able to hold on through this recession and still survive will probably not have the credit score that is normally required. I hope that some adjustments and consideration will prevail otherwise the money will not reach those who really need it. Less restriction is necessary to make this work.

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