Wayne Bell acknowledged Friday that the Small Business Administration’s biggest lending program doesn’t have funding, but he expects it to be a temporary situation. What you need to know about what’s happening with the 7(a) loan program:Why did the SBA stop approving loans? The SBA Express program, which guarantees a fast approval, and Veterans Advantage loans, designed for veterans and their spouses, are additionally on maintain as a result of they’re a part of the 7(a) program. Congress should increase the 7(a) ceiling for the cash to movement once more; if it does not, companies may have to watch for October. 1 to get their approvals. There is some good news in what’s happening at the SBA.
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The proven fact that the restrict was reached so early is a constructive signal for the financial system – business house owners are prepared to tackle dangers together with debt after hunkering down in the course of the recession and its aftermath. Last year, the SBA didn’t approach the 7(a) limit until September, but Congress raised the ceiling before it was reached.
An American Banker article Thursday said that lawmakers have begun considering Velazquez’ legislation, but they have not announced a timeline for a possible resolution.
“Small businesses are the economic engine of our nation, but they require capital to create jobs and fuel commerce”, Velázquez said in a press release.
July’s rush marks a fivefold increase over the normal volume, according to the SBA, which has granted more than 50,000 loans through the 7(a) program this year. And what happens to loans already submitted to the SBA? In the Los Angeles district, which includes L.A., Ventura, and Santa Barbara Counties, lenders made 2104 loans, totaling more than a billion dollars, a sizable share of the nationwide total.
The program backs commercial loans up to $5 million, but typically these are smaller-balance loans used to purchase property or for operations.
Loans for fixed assets like real estate will still be available under a separate program.
She said it would be “legislative malpractice” not to extend the loan program. Did this come as a surprise?
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SBA Administrator Maria Contreras-Sweet asked for congressional action on the matter in June, but some lawmakers have been reluctant to add funding because past studies have questioned the effectiveness of some of the agency’s programs. Have any bills been introduced in congress to raise the 7(a) ceiling? Yes. “Shutting down or disrupting one of the most important small business financing mechanisms we have at our disposal would be irresponsible and do great harm to our economy”.
