As part of the American Recovery and Reinvestment Act of 2009, signed by President Obama on February 17th, the Small Business Administration has been allocated $730 million intended to fund fee reduction, program policy changes and new loan programs that will collectively help to provide immediate financing assistance to small business owners.
This is OUTSTANDING news for K2 Commercial Finance borrowers! While the program and policy procedures have not yet been finalized by the agency, the following incentives were announced:
1. $375 million for temporary fee reductions or eliminations on SBA loans for the 7(a) Guaranty and 504 Loan Programs, as well as an increased SBA- loan guaranteed percentage up to 90% for certain loans
2. $255 million for a new SBA loan program which would provide up to $35,000 in guaranteed financing to help small businesses meet existing debt payments
3. $30 million for expanding the SBA Microloan Program through new lending and technical assistance grants to participating micro lenders
4. $20 million for technology systems to streamline SBA’s lending and oversight processes
5. $15 million to expand the SBA’s Surety Bond Guarantee Program
6. $25 million for increased staffing
7. $10 million for the Office of Inspector General
The SBA is working quickly to develop the policies necessary to implement the provisions of this act. As soon as the details are in place, K2 Commercial Finance will provide an update.
We believe that SBA loan programs are the best and most efficient way to get liquidity back into the small business marketplace. These government guarantee programs mitigate transaction risk and incentivise lenders to stop hoarding cash and to put money back into the hands of business operators.
Stay tuned for further updates!
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