Thursday, June 03, 2010

SBA Supports More Than $28.4 Billion in Small-Business Lending

The U.S. Small Business Administration [SBA] received $730 million in the American Recovery and Reinvestment Act [ARRA] to help unlock the small-business lending market and get capital flowing again to America’s small businesses. Due to the success of these programs, the SBA received an additional $305 million to continue some ARRA programs through May.

SBA Recovery Efforts -- Impact to Date
* SBA Supports More Than $28 Billion in Recovery Loans to Small Businesses: As of May 28, SBA had supported $28.4 billion-plus in small-business lending, with the approval of $21.4 billion in Recovery loans since Feb. 17, 2009. From Feb. 17, 2009, to May 28, 2010, weekly SBA loan dollar volumes rose more than 90 percent in the 7[a] and 504 programs, compared to the weekly average before passage.

* More Lenders Making Loans: From Feb. 17, 2009, to May 28, 2010, more than 1,321 lenders who had not made a loan since at least 2007, made at least one 7[a] loan.

* Broad Support to Businesses: A significant share of Recovery loans have gone to rural [24 percent], minority-owned [21 percent], women-owned [18 percent], and veteran-owned [8 percent] businesses.

* Secondary Markets Uptick With 7[a] Loans: After months of reduced activity and lower premiums, the SBA 7[a] secondary market is picking up and premiums are beginning to recover. From June to May, the average monthly loan volume settled from lenders to broker-dealers in the 7[a] secondary market has been $330 million, providing lenders with additional liquidity to increase lending.

* America's Recovery Capital [ARC] Loans Helping Small Businesses: As of May 28, SBA has approved 7,658 ARC loans totaling more than $248 million by 1,250 lenders, to help small businesses make it through this tough economy.

SBA Recovery Programs
To date, SBA has implemented programs for all of the $730 million in SBA Recovery Act funding -- plus an additional $305 million provided in December, February, March, and April for the agency’s lending programs -- including:

* Eliminating and reducing fees for borrowers on 7[a] loans, and for borrowers and lenders on 504 loans;

* Raising to 90 percent the guarantee on 7[a] loans from 75 or 85 percent, depending on the size of loan;

* Doubling the surety bond guarantee from $2 million to $5 million, providing small businesses with another tool to help them compete for federal construction and service contracts;

* Assisting struggling small businesses with the new ARC loan program, which provides no-interest, deferred-repayment loans of up to $35,000 to viable businesses to help them make debt payments;

* Providing refinancing opportunities for certain eligible loans into SBA-backed 504 loans for expansion and job creation;

* Expanding access to investment capital for small businesses by increasing funding levels for SBA-licensed Small Business Investment Companies [SBICs]; and

* Taking steps to ensure the stability of the secondary market for SBA loans.

The SBA has also implemented two new programs that complement the ARRA measures and increase access to capital for small businesses by:

* Expanding 7[a] loan eligibility to more than 70,000 small businesses through a temporary alternate size standard; and

* Offering inventory financing for eligible auto, RV, boat and other dealerships under the new Dealer Floor Plan Financing pilot program.

To learn about how SBA and the Recovery Act are helping small businesses succeed throughout the nation, go to:

SOURCE: U.S. Small Business Administration

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