On congressional incumbents’ to-do list ahead of the midterm elections: Help small businesses by boosting their access to capital as well as to export markets.
Lawmakers will extend until Dec. 31, 2010, provisions that eliminate fees on the Small Business Administration’s (SBA) 7(a) and 504 loans and increase lender guarantees from 75% to 90%. Moreover, they’ll hike the limit on 504 loans from $2 million to $5 million and raise the limit on 504 loans from $1.5 million to $5.5 million.
SBA 7(a) loans are general business loans that can be used for a variety of purposes, while SBA 504 loans are specifically designed to help small businesses acquire fixed assets such as real estate or equipment.
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In addition, legislation pending on Capitol Hill would hike the loan limit on microloans from $35,000 to $50,000 and increase the maximum loan made to a microloan intermediary from $3.5 million to $5 million. Further, it proposes that the SBA create a Web site through which small businesses can identify lenders in their communities.
Congress will also authorize the agency to increase loan amounts and assistance to small companies seeking export opportunities, figuring that increased export sales will bolster the creation of new jobs. Specific steps include raising, from $2 million to $5 million, the maximum amount of an International Trade Loan or Export Working Capital Program loan plus bolstering the number of SBA export financing specialists assigned to export assistance centers.
“There is bipartisan support and lawmakers are certainly responding to criticism” that they haven’t done enough to help small companies, says Bob Coleman, a small-business lending expert.
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