This evening I again want to stay on the topic of SBA financing. As I wrote yesterday and shared with over 35 people this morning SBA is getting an overhaul. The ultimate goal of the overhaul is to bring back the secondary market. If we are successful in getting the secondary market back, then SBA 7A loans as we knew them a year ago will come back again. The lenders will have a place to sell their loans and then hey will be more willing to lend again.
If the lenders do not have a place to sell their loans then they are left portfolioing the loans and they will continue to remain very skittish on new loans. They will only fund the cream of the crop. Below is a copy of a senate proposal that is being raised to help bolster small business and small business financing.
For more on how we can benefit your small business please visit loanforbiz.com, while there sign up for your FREE 10 Special Reports to help you get your next loan closed.
SOURCE U.S. Senate Committee on Small Business & Entrepreneurship
Sen. John Kerry (D-MA), Chairman of the Senate Committee on Small Business and Entrepreneurship, and Sen. Charles Schumer (D-NY), a senior member of the Senate Committee on Banking, are urging their Republican colleagues to put politics aside and help America's entrepreneurs stressed by a worsening economic climate. Several small business proposals within the economic stimulus package introduced this week would help alleviate the credit crunch, providing much-needed help to small firms.
"As the lifeblood of our economy, small business owners bear much of the burden when our system struggles," said Kerry. "To keep our economy moving we need to help these everyday Americans who are pleading for help as they try to pay their bills and stock their shelves for the holiday season."
When credit from the private sector is frozen, small firms rely on the Small Business Administration's (SBA) loan programs to free up credit. The stimulus provides $620 million targeted to help firms gain greater access to these SBA loans. Of that money, $615 million would temporarily eliminate fees charged to borrowers and lenders who participate in these government-backed programs, helping to support $22.5 billion in loans to entrepreneurs. Additionally, $1 million is provided to support $8.5 million in microloans and $4 million for microloan counseling. These actions would free up credit, give small businesses more outlets for help and allow firms to create and retain jobs in these tough economic times.
"Small businesses are looking to us for immediate help and leadership," said Kerry. "Entrepreneurs can't afford to wait another month, or more, for the rescue package to begin working. And frankly, neither can our economy or the hundreds of thousands in need of jobs.
"With the credit markets tighter than ever and the economy plunging in to greater turmoil every day, we need every tool in the toolbox to ensure small businesses across the country get the loans they need," Schumer said. "For many right now, government loans could be the only option. Our plan will reduce needless fees and streamline the process so businesses don't have to wait months and pay through the nose to get the lines of credit they need."
Copyright (C) 2008 PR Newswire. All rights reserved
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