The U.S. Small Business Administration (SBA) is finalizing plans for an orderly transition from SBA loans with temporary enhancements provided under the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”). Recovery Act loans will no longer be available after expiration of the authority for the higher guaranty on 7(a) loans on February 28, 2010 and exhaustion of funds for the higher guaranty and for fee relief under the 7(a) and 504 programs. “This is disappointing news,” said Gary Unkel, Senior Loan Originator at ValueXpress. “All indications pointed to an extension of the fee waiver until the end of 2010. Recognizing that many of the new jobs being created in this country arise from small businesses, it is a shame that our leaders will let these benefits to small businesses expire.” Furthermore, should the guaranty fee waiver and increased guaranty amount expire on February 28, it makes it even more unlikely that the proposed increase to $5 million in SBA 7(a) loan amounts in addition to SBA 504 loan enhancements will ever be passed into law.
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