The Small Business Administration is considering new guidelines for loans. With thanks to Bernie Siegel for his work to move this forward, and for summarizing the details here. If these new SBA guidelines are implemented, it will go a long way toward helping business owners exit, and buyers to begin new businesses.
SBA Update
Small Business Administration Loans
By: Bernard Siegel, Founder and Chairman, SFG Business Services
Highlights of the legislation include:
- Increase the loan limit on 7(a) loans from $2 million to $5 million.
- Increase the loan limit on 504 loans from $1.5 million to $5.5 million.
- Increase the loan limit on microloans from $35,000 to $50,000.
- Allow the 504 loan program to refinance short-term commercial real estate debt into, long-term, fixed rate loans.
- Extend the authorization to provide 90 percent guarantees on 7(a) loans and fee elimination for borrowers on 7(a) and 504 loans through December 31, 2010.
- Direct the SBA to create a website where small businesses can identify lenders in their communities.
- Increases the maximum guarantee on 7-A loans to $4.5 million
- Changes the eligibility criteria to (a) a tangible net worth not to exceed $15 million and (b) the average net income after Federal Taxes over the past two full fiscal years is not more than $5,000,000.
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