Unlock Credit for Small Businesses
By Jane Burroughs, EDC VP, Operations
"Unlock Credit for Small Businesses" is part of the Stimulus Bill that was signed February 17, 2009--details were released March 16, 2009. Read below for an outline of areas that will ensure credit gets flowing again to entrepreneurs and to business owners.
1. The Treasury Department will commit up to $15 billion to help unlock the secondary markets for small business loans. By purchasing these securities, the Treasury Department will facilitate the ability of lenders to make new loans to small businesses by providing confidence that there will be a ready buyer for those loans in the secondary market
2. Temporarily raise guarantees to up to 90 percent in SBA's 7(a) loan program
3. Temporarily eliminates SBA loan fees to reduce the cost of capital
--Fees will be reduced for 7(a) loans
--Fees will be eliminated for 504 loans
4. New reporting requirements on bank lending to small businesses and greater efforts to extend small business loans
5. Issue Guidance for an expanded Carryback Provision as part of the Recovery Act's comprehensive tax cut package for small business
6. Business Stabilization Loans--SBA loan program to provide deferred-payment loans of up to $35,000 to viable small businesses that need the money to make payments on an existing, qualifying loan for up to six months.
7. Microloans--This bill expands SBA's Microloan program, which provides small loans (up to $35,000) paired with technical assistance to start-up, newly established or growing small businesses.
For more information, please visit the following websites:
SBA Applauds Stimulus Bill, Planning Underway for Broadest, Quickest Small Business Impact
Q&A for Small Business Owners
If you have any questions, contact your bank or SBA location or call Jane Burroughs with the EDC at 319-369-4955.
