Stimulous for Small Business Owners
Small Business Administration (SBA) loans have always been a great fit for new and expanding businesses. The loan programs offer fixed rate options, extended repayment terms and lower down payments. Participating banks benefit from the SBA guarantees on the loan on their balance sheet. Recent changes in the loan programs have eliminated fees and lowered the closing costs associated with SBA loans. The economic stimulus program included these enhancements to the SBA loans that make the programs an even better option for the small business owner to consider because the business owner can access the favorable loan terms, but with reduced fees.
Recent economic stimulus program enhancements for the SBA loan programs:
Lender Participation Fee and CDC Processing Fee Eliminated in the SBA 504 Fixed Asset financing program (while funds are available – projected to be in place through 12/31/09). SBA 504 loans are utilized when a business seeks to finance new fixed assets (land, building, equipment). The SBA 504 loan is done in partnership with your local banker and provides a long-term, fixed rate loan for up to 40% of the expansion project.
Lender Guaranty Fee Eliminated in the 7A Guaranty Program (projected through 12/31/09). The SBA 7A loan program can be used for working capital, debt refinance, and other expenses and is provided by commercial lenders.
On June 15, 2009, SBA is launching a New 100-Percent Guarantee America’s Recovery Capital (ARC) Loan Program to Help Struggling Businesses – ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans will be made by commercial lenders and are interest-free to the borrower, 100% guaranteed by the SBA, and have no SBA fees associated with them.
For more information on these SBA programs, go to www.sba.gov.
For small business assistance, contact Brittany Hotlzclaw at the Greater Hall Chamber, 770-532-6206 or brittany@ghcc.com. Contact Lorra Lee, President of the Economic Development Corporation (EDC), an SBA 504 certified lender, 770-536-7839 or Ron Simmons, Director of the Gainesville office of the University of Georgia’s Small Business Development Center (SBDC), 770-531-5681 or rsimmons@georgiasbdc.org. The SBDC provides confidential, free assistance with marketing, cost and performance analysis, and the loan application process.