Small Business Administration, American Recovery and Reinvestment Act, & The Effect on Business and Commercial Loans

The American Recovery and Reinvestment Act contains multiple changes to the Small Business Administration's programs. These changes have been put into effect to encourage lenders to open up their lending to the small business sector. These changes can effect small business loans and commercial loans of many different sizes and in many different ways. This act is critically important in the lending industry, and so we thought we'd share some highlights.

-The present SBA guarantee was up to 85%. This has been increased to 90% on some loans to encourage lenders to continue financing.

-A new business stabilization loan is in the works which will be 100% guaranteed by SBA. These loans will be up to $35,000 to help businesses refocus and succeed long term.

-The 504 Certified Development Company program now allows refinancing of existing loans for fixed assets.

-Guarantee fees for the 7(a) and 504 programs have been temporarily eliminated allowing less upfront expense for both the borrower and the lender.

For more information on the stimulus package visit www.sba.gov/recovery

SCORE which is a resource partner of the SBA offers counseling services nationwide. SCORE offers mentoring and counseling services to small business throughout the country. SCORE is working with the SBA to help inform small businesses of these changes and the effects they may have. Workshops are also being put on to get the word out and to educate the small business owners of America.

We at Commercial Finance Help have active volunteers participating in Broward County. For more info on the Broward County chapter of SCORE, visit www.browardscore.org . If you are outside of the Broward County, FL area, visit www.score.org to get more information.

SCORE and the SBA are here to make sure small businesses are here to stay. These resources are invaluable to maintaining your success. They're here, so use them!