SBA program attracts borrowers

NORTH BAY – In February, the Small Business Administration and Congress rolled out a program to make SBA loans more attractive to both lenders and borrowers by increasing the guarantee percentage and waiving fees.

It worked: $730 million was allotted and the guarantee went from 75 percent to 90 percent.

But the money that was set aside ran out more than a month before it was expected.

“It caught us a little by surprise,” said Michael Rice, senior vice president of small business lending at Circle Bank. “It was tracking to run out at the end of December, so a lot of lenders scrambled to get in as many as we could.”

SBA loans are up compared with last year. Nationwide, the number of loans is up 66 percent, and the dollar amount is up 90 percent. There is legislation trying to keep these incentives around for people interested in SBA loans and some on the table for new programs as well.

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