Immediately H.R. 5297 was signed, the SBA began processing a back-log of loans previously submitted for fee relief under ARRA. Within a week of the enactment of H.R. 5297, almost 1900 new SBA loans had been authorized under both the 7(a) and 504 loan programs.
Soon afterwards, the SBA announced higher size standards allowing small business applicants (including their affiliates) whose tangible net worth was $15 million or less, and, whose average net profit after taxes for the last two full years was $5 million or less, to now qualify for SBA programs. This will allow larger small businesses to begin to access all the SBA products.
Late yesterday, the SBA finally issued notices allowing lenders and certified development companies to begin submitting requests for larger SBA loan amounts, and, contrary to some earlier speculation (i.e., some stupid rumors), larger loan amounts are eligible for the temporary fee relief provisions.
To summarize SBA notices 5000-1182, 1183 & 1184:
- The maximum amount for which a micro-loan may be approved by a micro-loan intermediary is now $50,000 (previously $35,000 was the maximum).
- The maximum loan amounts under the SBA 504 loan program are now $5,000,000 for "generic" or SBA public policy goal projects, and, $5,500,000 for projects involving small manufacturers or those meeting one of two special "green" goals.
- The maximum loan amount under the SBA 7(a) loan program is now $5,000,000. The maximum amount of the SBA Guaranty to any one borrower, including all affiliates, is now $4,500,000 (= 90%) through 12/31/2010 and then $3,750,000 (= 75%) beginning 01/01/2011.
- Please note: beginning at the start of next year, the guaranty percentages on 7(a) loans will revert to 75% for loans greater than $150,000 and 85% for loans of $150,000 or less.
- The maximum SBA Export Express loan has increased to $500,000. The maximum amount of the SBA Guaranty to any one borrower, including all affiliates, is now permanently 90% for loans of $350,000 or less and permanently 75% for loans greater than $350,000.
- The maximum SBA Export Working Capital Program (EWCP) loan amount is now $5,000,000. The maximum amount of the SBA Guaranty to any one borrower, including all affiliates, is now permanently $4,500,000 (= 90%).
- The maximum SBA International Trade loan amount is now $5,000,000. The maximum amount of the SBA Guaranty to any one borrower, including all affiliates, is now permanently $4,500,000 (= 90%).
- The maximum SBA Express program loan limit is now $1,000,000 through 09/26/2011, reverting to $350,000 beginning 09/27/2011. The maximum Guaranty percentage remains unchanged at 50%.
- The maximum SBA Community Express loan limit remains at $250,000 although through 12/31/2010, the maximum Guaranty percentage increases to 90%. Beginning 01/01/2011, the maximum Guaranty percentage reverts to 85% for loans of $150,000 or less and 75% for loans greater than $150,000.
- The maximum SBA Patriot Express loan limit remains at $500,000 although through 12/31/2010, the maximum Guaranty percentage increases to 90%. Beginning 01/01/2011, the maximum Guaranty percentage reverts to 85% for loans of $150,000 or less and 75% for loans greater than $150,000.
With the publication of these notices allowing the larger loan limits, hopefully, the next task the SBA will tackle is the rule-making / notice-issuing process associated with introducing the stand-alone SBA 504 refinancing provisions.
Some (not naming any names) would suggest that the stand-alone, two-year 504 refinance provision, will do more for economic development in this country than any of the other provisions in H.R. 5297, and all without the need for specific tax payer subsidization! Remarkable.
