After slow start, higher loan ceiling, fee waivers drawing some borrowers
NORTH BAY – The Small Business Administration is finally seeing an uptick in loan applications since the introduction of enhanced programs as part of the recovery act earlier this year.
In April, $700 million was allotted to the Small Business Administration to go toward five programs to help increase SBA lending, which has opened up SBA eligibility to 70,000 more businesses because it is based on profitability rather than size.
About $375 million was set aside for temporary fee eliminations on SBA loans as well as an increase of guarantee limits from 75 percent to 90 percent. Also, the America's Recovery Capital loan program enables banks to make 100 percent guaranteed loans for struggling business owners for up to $35,000.
Karen Mills, SBA administrator, in an address on Sept. 22, said, “SBA weekly loan volume is up about 60 percent compared to the two months before the recovery act. We’ve supported over $10 billion in lending so far. We’re back near 2008 levels in weekly loan volume.”
With fee eliminations alone, a business can save more than $50,000 on a $2 million loan.