ValueXpress is not sure if or when the bill that includes an increase in loan limits for the SBA 7(a) program and 504 program will be passed. The bill, “The Small Business Job Creation and Access to Capital Act of 2009,” has four major components:
1. An increase in the SBA 7(a) loan limit from $2 million to $5 million;
2. An increase in the SBA 504 loan limit from $1.5 million to $5.5 million;
3. A provision to allow business owners to refinance their commercial property with the SBA 504 program; and
4. An extension of the 90% SBA guaranty for 7(a) loans and a continuation of the SBA fee waivers for 7(a) and 504 loans through the end of 2010. This is probably the most important piece of legislation in the bill since many banks and lenders do not feel comfortable with anything less than a 90% guaranty from the SBA.
Focus appears to be on the fourth component of the bill. Currently, the 90% SBA guaranty has been extended from December 19, 2009 through February 28, 2010, and a backlog of loans awaiting the guaranty extension was processed. The SBA plans to push for more funding to continue the stimulus measures. The U.S. House of Representatives passed a jobs bill late in 2009 that includes another $354 million to fund an extension of waived fees and increased guarantees through the end of 2010. The U.S. Senate will take up the bill when it returns from its winter recess. It is unclear whether the first three components of the bill are progressing.
“We hope that an increase in the loan limits (and corresponding increase in the guaranty) does not get lost in the focus to simply extend the 90% guaranty and the continuation of fee waivers,” commented Michael Sneden, Executive Vice President of ValueXpress. “While this is extremely important, the increase in the loan limits would greatly increase the universe of potential businesses that would be able to utilize SBA programs.”