SBA Expands Eligibility for 7(a) Loans To Spur Recovery Opportunities for Small Busi

[Beth n Rod 1,279]

Just got this in email, and thought it might be helpful

Beth

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SBA Expands Eligibility for 7(a) Loans To Spur Recovery Opportunities for Small

Businesses

WASHINGTON – More small businesses will be eligible for U.S. Small Business

Administration-backed loans, meaning greater access to much-needed capital

in this tough economy, as a result of a temporary alternate size standard for

the agency's largest lending program.

SBA’s alternate size standard for its 7(a) loan program will go into effect early

next week through Sept. 30, 2010. As a result of the temporary change, more

than 70,000 additional small businesses – including auto and RV dealerships,

auto industry suppliers and others – could be eligible to apply for SBA 7(a)

loan.

“This is just one more step we are taking to make sure small businesses have

access to capital to keep their doors open and employees working during

these tough economic times,” SBA Administrator Karen Mills said. “We have

seen signs that small businesses that are just outside the traditional 7(a) size

standard are being shut out of the conventional lending market. This

temporary change will help those businesses weather these tough times and

help move our nation closer to economic recovery.”

The temporary 7(a) loan size standard will parallel the standard for the

agency’s 504 Certified Development Company loan, and will allow businesses

to qualify based on net worth and average income. The net worth for the

company and its affiliates can’t be in excess of $8.5 million and average net

income after federal income taxes (excluding any carry-over losses) for the

preceding two completed fiscal years can’t be more than $3 million. The

alternate size standard is available at the offices of The Federal Register

today and will be published as an interim final rule early next week.

The temporary change to the 7(a) loan size standard is not unprecedented.

SBA took similar actions in 1993, as a result of the recession of the early

1990s, and again in 2005 as part of a program aimed at helping small

businesses in the wake of hurricanes Katrina and Rita.

This change also means more small businesses can take advantage of benefits

made possible through the Recovery Act. On March 16, the SBA implemented

two key provisions of the Recovery Act that raised the guarantee on 7(a)

loans to 90 percent and reduced fees for borrowers. Since then, the agency

has seen average weekly 7(a) loan volume increase by more than 25 percent

and new SBA loans made by nearly 450 lenders who had not made loans since

October 2008.

For more information about SBA’s revisions to its small business size standards,

visit Small Business Administration - Size Standards and click on “What’s New

about Small Business Size Standards.”

[PressurePros 249]

Just a longshot thought.. I wonder if fleet washing guys would be eligible?