Billions for Banks - Pennys for Small Business
WASHINGTON (Reuters) - The Small Business Administration said on Tuesday that supplemental economic stimulus funds for its two most popular loan programs have run out and new loan volumes could fall if funds are not extended.
The SBA said $375 million in Recovery Act funds for use in 7(a) and 504 loan programs were exhausted by Monday, leaving thousands of struggling but viable small businesses in limbo unless new resources can be found.
The money was used to temporarily reduce fees on SBA-backed loans and raise SBA's guarantee percentage on some loans to 90 percent from 75 percent. This saved small businesses up to $60,000 in fees, made lenders more willing to extend credit and helped lure investors back into the market for securities backed by SBA loans.
Categories: Revolution, Economy, Government
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