Jackson Citizen Patriot
The economic stimulus bill increased the SBA's guarantee on its flagship loans from the usual 75 percent to 90 percent, and reduced or eliminated fees on loans primarily used to finance real estate. These enhancements made SBA loans less risky for lenders and less expensive for borrowers.
On Nov. 23, the SBA ran out of the $375 million in stimulus funds that made the higher guarantee and fee reductions possible. Congress restored these enhancements Dec. 21, with $125 million in additional funding, but that money is expected to last only until Feb. 28, according to the Washington Business Journal.
In recent weeks, SBA lenders have rushed to submit their loan applications to the agency before this money ran out. The rush accelerated Feb. 11, when Senate Majority Leader Harry Reid, D-Nev., stripped funds for another extension of the SBA loan enhancements from the jobs bill scheduled for Senate action this week.
Automation Alley, a technology business association in Tory, Michigan, is concerned about the need for this program to promote small business lending and spur job creation in Michigan.
Automation Alley's Executive Director Ken Rogers participated in a follow-up to President Obama’s “Forum on Jobs and Economic Growth” last week and addressed the need to increase capital for small business by reauthorizing the program, increasing loan limits and reducing fees for small business.
In a phone interview with Michigan Job Search, Rogers said it's critical for Michigan small business that these loan guarantees be extended. "Small businesses are the nation's biggest job creators," he said, "creating 80-85 percent of new jobs."
Without these programs to incentivize lenders to provide loans to small business in order to allow them to expand, fill orders and hire, "everything comes to a crashing halt because banks just aren't lending," he said. "This program has opened the door to capital for small business. Without it, the door will slam shut."
Rogers said that there has been talk of adding an extension of the SBA loan breaks to the Senate jobs bill being taken up this week, as well as talk of passing a one-month extension before the program expires on Feb. 28. He hasn't heard anybody talk of wanting to kill the program.
"We hope common sense prevails and the loan breaks will continue," he said.
On Nov. 23, the SBA ran out of the $375 million in stimulus funds that made the higher guarantee and fee reductions possible. Congress restored these enhancements Dec. 21, with $125 million in additional funding, but that money is expected to last only until Feb. 28, according to the Washington Business Journal.
In recent weeks, SBA lenders have rushed to submit their loan applications to the agency before this money ran out. The rush accelerated Feb. 11, when Senate Majority Leader Harry Reid, D-Nev., stripped funds for another extension of the SBA loan enhancements from the jobs bill scheduled for Senate action this week.
Automation Alley, a technology business association in Tory, Michigan, is concerned about the need for this program to promote small business lending and spur job creation in Michigan.
Automation Alley's Executive Director Ken Rogers participated in a follow-up to President Obama’s “Forum on Jobs and Economic Growth” last week and addressed the need to increase capital for small business by reauthorizing the program, increasing loan limits and reducing fees for small business.
In a phone interview with Michigan Job Search, Rogers said it's critical for Michigan small business that these loan guarantees be extended. "Small businesses are the nation's biggest job creators," he said, "creating 80-85 percent of new jobs."
Without these programs to incentivize lenders to provide loans to small business in order to allow them to expand, fill orders and hire, "everything comes to a crashing halt because banks just aren't lending," he said. "This program has opened the door to capital for small business. Without it, the door will slam shut."
Rogers said that there has been talk of adding an extension of the SBA loan breaks to the Senate jobs bill being taken up this week, as well as talk of passing a one-month extension before the program expires on Feb. 28. He hasn't heard anybody talk of wanting to kill the program.
"We hope common sense prevails and the loan breaks will continue," he said.
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