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Monday, December 14, 2009

Are SBA Loans Making A Comeback?

The status of SBA loans seems to change every week. One week, there's plenty to go around. The next week, there's not enough. One week, the interest and fees are too high. The next week, the interest and fees are waived.

Well, here's the latest: Several senate proposals are being introduced that, if approved, would increase the maximum loan amounts for SBA-backed loans and extend fee eliminations and government loan guarantees. Under these new proposals, fees for 7(a) SBA-backed loans would continue to be waived and the federal government would continue to provide 90 percent guarantees on loans.

Most importantly, loan limits would be extended. 7(a) loan limits would move from $2 million to $5 million, 504 loans would expand from $1.5 million to $5.5 million, and micro loans could expand from $35k to $50k.

Not a bad deal at all, if the federal government would actually approve the proposed changes. In fact, it would be quite contradictory if they didn't approve such changes - being that President Obama just recently addressed CEOs of the nation's banks encouraging them to loan more money to small businesses.

But politics is politics.
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