Auto industry and Financial behemoth have had plenty of time under the sun when it comes to Stimulus package and tax payers money going to these corporate titans. Now is the time for an entity which literally forms the backbone of America. Yes that right, the Small business owners who have so far stood on the bylines and watched with exasperation as they crumbled under the poor economic conditions. But now relief is on the way.
Obama’s administration absolutely recognizes the importance of SBA and how mom and pop stores power certain sections of America. In the just passed economic recovery bill which has the Stimulus Package 2009, the government is making it simpler for such companies to get loans from the Small business Administration.
If you have been watching this space, you know that in America the most popular loans are called the 7a loans and government is doing a great thing for these loans. It is totally removing the fees incurred on this loan. I think that is a great point. So in effect a greater portion of the loan goes to these small businesses who can then make the best use of the money.
But 7a loans are not the only ones getting a face lift. Even the CDC / 504 loans wont have any fees slapped on them.
Take a look at this. The times are so bad that if you measure the Small business lending when calculated based on 7a loans given out, they have plunged over the past 2 years. Last to last year in 2007, about 99,600 loans were given out. These came to be about 14.3 billion dollars. And last year? i.e in 2008, only 12.67 billion dollars worth of loans were approved.
What is SBA’s 7a Loan Program
The 7a program is intended to help small businesses borrow for a variety of reasons when they don’t get a loan from regular channels like banks etc. The difference here is that the government guarantee’s a substantial portion of the loan. So in effect there is no or very little risk for the lender.
I came across another article on this issue, check it out from SBA Loans in Obama Stimulus Package 2009.