Expect Higher Fees and Lower Guarantees as SBA Stimulus Money Runs Out

The SBA is preparing to transition back to loans with lower guarantees and higher fees as the fund for those programs established by the American Recovery and Reinvestment Act (ARRA) runs out and the February 28 authorization for the programs expires. The funds allowed the SBA to raise the guarantee on many loans from 75 percent to 90 percent to incent lenders to make more loans; likewise, the funds were used to offset a decrease in borrower fees to entice small businesses to seek credit.

As part of the transition back to the previous terms, the SBA is re-activating the Recovery Loan Queues. Sometimes previously approved loans are later cancelled or never disbursed for a variety of reasons. The Queues take this into account and allow eligible small businesses, in consultation with their lenders, to choose to be placed in the queue for possible approval for an ARRA loan if funding becomes available. Small business owners and lenders have transparent access to the queue via http://www.sba.gov/recoveryq and can remove themselves from the queue at any time.

There’s still a chance that Congress could reauthorize the stimulus-back loans, but Senate Majority Leader Harry Reid did not include them in the recent jobs bill. More on this later . . .

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About Smart Companies Thinking Bigger®

Kelly Scanlon is the owner and publisher of Thinking Bigger Business Media. She recently finished a term on the national board of directors of the National Association of Women Business Owners, and was the national chair from 2010-2011. An advocate for small business owners, Kelly sits on numerous boards and committees to advocate on behalf of small business owners. She has won several awards for her advocacy. Among them are the 2011 United Nations NGO Positive Peace Award on behalf of Kansas City area small business owners, the U.S. Small Business Administration's Region VII Women's Business Champion of the Year in 2009, and the Women in Business Advocate of the Year from the State of Kansas in 2006. In 2002, she won the SBA's Region VII Small Business Journalist of the Year Award (Missouri, Iowa, Nebraska, Kansas). Whatever your business stage—aspiring, startup, established, mature—Thinking Bigger Business Media has the resources you need to grow to the next level. We are a resource organization dedicated to providing the strategic, "how-to" information small business owners need to become more productive and more profitable. We also provide information that helps owners connect with resources within the business community that can help them grow. We deliver that information through a variety of media products and other channels easily accessible to business owners.
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