The Senate voted to extend funding for Small Business Administration lending programs in the Recovery Act through February 2010.
The extension was included in the Defense Appropriations bill that was passed on Saturday. Senate Small Business and Entrepreneurship Committee chair Mary Landrieu, D-La., had requested the extension, along with 12 other lawmakers, in a letter to the Appropriations Committee last week (see Senators Want to Extend SBA Lending Programs). Nearly 1,000 small businesses have been on a waiting list for about $500 million in SBA-backed loans.
"Small businesses have been left in limbo since the funding ran out in late November, said Landrieu in a statement. Today's action by the Senate will immediately clear the waiting list established by the SBA and will provide a lifeline to small businesses in need of credit."
She noted that with the additional funds, the SBA will be able to offer lenders a higher guarantee for 7(a) loans and a fee waiver on 504 loans, and reduce the cost of capital for small businesses by waiving the fees on both 7(a) and 504 loans. Since funds from the Recovery Act ran out in late November, the volume of 7(a) and 504 loans has drastically decreased, she added.
Of the $479 million dollars requested by the senators, $125 million is included in the Department of Defense Appropriations Bill, with the remaining $354 million included in the jobs-creation package introduced in the House. The House jobs-creation package, which is expected to be considered by the Senate early next year, also includes a provision to extend the authorization for the 90 percent guarantee on SBA loans through fiscal year 2010.
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