It has been a little more than 100 days since President Obama signed the American Recovery and Reinvestment Act. In that time, the U.S. Small Business Administration has implemented new programs to get credit flowing again, and has several more on the way to help small businesses weather this economic storm, and ultimately continue to grow and create jobs.
First and foremost, we enhanced our top two loan programs – 7(a) and 504 – which have so far resulted in $4.3 billion in new loans for small businesses. The SBA temporarily eliminated fees for borrowers on its 7(a) loans and for both borrowers and lenders on its 504 loans. The SBA also temporarily raised the guarantee on most of its 7(a) loans to as much as 90 percent, up from 75-85 percent. In this short time, there has been a 30 percent increase in average weekly loan dollar volume compared to the weekly average before the passage of the Recovery Act.
Last week, SBA launched the America’s Recovery Capital loan program. ARC loans will provide a “bridge” for many small businesses to the better economic times ahead. This program provides loans of up to $35,000 to viable, but struggling small businesses to help them make debt payments. ARC loans are interest free to the borrower with deferred repayment terms and feature a 100 percent SBA guarantee to the bank. The SBA also makes the interest payments to the bank.
With the launch of ARC loans, SBA has now put in place programs implementing 88 percent of the $730 million provided to the agency by the Recovery Act.
Small businesses are the key to our nation’s economic recovery. The SBA is using every tool in our toolbox – and creating new ones when necessary – to help small businesses lead us out of these tough economic times.
Jayne Armstrong, SBA Delaware Office
