With tax incentives and steps to encourage lending, the American Recovery and Reinvestment Act recognizes that small businesses are part of the solution to getting our economy moving again. The bill's primary goals for the U.S. Small Business Administration are jump-starting job creation, re-starting lending and promoting small business investment.
The Act provides SBA with $730 million. This includes $375 million to temporarily eliminate loan fees and raise guarantee limits on some loans; extra funding for SBA-backed Microlenders; and $255 million to help viable small businesses with immediate economic hardship meet existing loan payments.Small businesses that need surety bonds to compete for contracts also can qualify for SBA-backed surety bonds of up to $5 million, more than double the previous $2 million maximum.
Another element, which is already in place, is SBA's Microloan program. These non-profit, community-based lenders make loans of up to $35,000 to small businesses and start-ups. The act funds $50 million in new loans by Microlenders, plus $24 million to help pay for technical assistance and training from the lenders.
In addition, the Treasury Department will commit up to $15 billion in TARP funds to help unfreeze the small business lending market.
There are a lot of moving parts, but our aim is to put these programs in place as quickly as we can so they have the broadest effect possible.
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