President Barack Obama on Friday signed legislation extending through April the U.S. Small Business Administration’s ability to provide enhancements in its two largest small business loan programs.
The enhancements, first made available under the American Recovery and Reinvestment Act, include a higher guarantee on some SBA-backed loans and fee relief.
The SBA estimates the $40 million extension will support about $1.4 billion in small business lending.
As part of the Recovery Act enacted Feb. 17, 2009, the SBA received $730 million to help small businesses, including $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. Funds for those programs were exhausted
Nov. 23, 2009, and an additional $125 million was provided in December. Those funds were exhausted in late February. An additional $60 million was provided, which was exhausted late last week.
Under the new extension SBA may continue to waive loan fees and provide higher guarantee levels on 7(a) loans through April, 30, or until the funds provided under the bill are again exhausted.
This extension does not affect other SBA Recovery Act programs, including the America’s Recovery Capital loan program or the agency’s microloans, for which funding is still available.