President Obama signed legislation late Friday that would extend enhancements for the SBA's two largest loan programs that is estimated to support nearly $1.4 billion in small business lending.
Under the new $40 million extension the SBA said it may continue to waive loan fees and provide higher guarantee levels on 7(a) loans through April, 30 or until the funds provided are exhausted.
As part of the Recovery Act enacted on Feb. 17, 2009, the SBA received $730 million to help small businesses, including $375 million to increase the agency's guarantee on 7(a) loans to 90% and to waive borrower fees on most 7(a) and 504 loans. The funds for these programs were exhausted on Nov. 23, 2009, and an additional $125 million was provided in December. Those funds were exhausted in late February and an additional $60 million was provided subsequently. That funding was exhausted March 26.
The increased guarantee and reduced fees on SBA loans helped put more than $23 billion into the hands of small business owners and brought more than 1,100 lenders back to the agency's loan programs, the SBA said. As a result, average weekly loan approvals by SBA have climbed by 86% compared to the weekly average before passage of the Recovery Act.