SBA Rules for Fall 2010
There are provisions in a new bill that provides you with immediate benefits:
1. No fees on Small Business Administration (SBA) loans – if you borrow $500,000 under the SBA program for working capital, inventory, equipment or to cover other business expenses, you would have to pay roughly 3% of the guaranteed portion (in this example – $13,500). Under the new provision, the government has reduced the fee to zero ($0.00). Benefit – You can save thousands of dollars by applying now for SBA business financing.
2. Increased the maximum SBA loan size – The SBA 7a loan has been increased from $2 million to $5 million. The SBA 504 program has been increased to cover project costs up to $10 million. Benefit – This helps many midsize businesses that need larger loan amounts to either buy commercial property, refinance debt or to buy capital equipment to expand their business.
3. The guarantee percentage has been increased to 90% – SBA loans issued under the 7a program are now 90% government guaranteed. For example, if you borrow $1,000,000 under the 7a program, the SBA guarantees $900,000 of the loan against loss to the bank. Benefit – This provision has made it easier to qualify for new business financing.
4. $30 Billion fund available to small community banks for small business funding – This is to help small, regional banks (assets less than $3 billion) increase lending to small businesses. Benefit – You now have more choices to access business loans. Just because you have been turned down by a large commercial banks does not mean you can’t get financed.
5. Increase in the definition of a small business – As of October 1, 2010, a small business is now defined as a business that has less than $5 million of net income averaged over the last 2 years and less than $15 million in net assets. Under these new guidelines, there are more than 35 million small businesses in the United States and the territories that are now eligible to receive funding. Benefit – The program is not just for the mom and pop businesses. The SBA program has been redesigned to help small and midsize businesses access federal funding.
To learn more about the new SBA Business Funding Bill and to receive your SBA Eligibility Consultation, please fill out an online quick-application form and tell us about your project.