Small Business Cents

[#1]

Earlier today, President Obama and Treasury Secretary Geithner announced a plan to free up credit markets to help the nation’s struggling small businesses.   

The plan includes a release of $375 million for small business lending provided in the economic stimulus plan, which will increase the maximum SBA loan guarantee to 90 percent, and temporarily waive fees paid by borrowers.  

Primary bank lenders often sell SBA loans in the secondary market, and use the proceeds of these sales to make new loans to other small businesses.  However, investors have been reluctant to buy these loans.  This means banks have not been able to make as many small business loans.

As a measure to unfreeze the secondary credit market, the President announced the U.S. Treasury will invest up to $15 billion in securities backed by SBA loans.

Visit the U.S. Dept of the Treasury's Unlocking Credit for Small Business Factsheet for more information.

Message Edited by BobK on 03-16-2009 03:05 PM

[#2]

What credit help is available for small business whose credit has been hurt. There seems to be no change in the credit score rating?

[#3]

Will the recovery process address and consider  credit issues that small disadvantaged businesses are now facing?

[#4]

ConstChick,

Some states are using the stimulus money to help guarantee lines of credit, which are intended to help business suffering as a result of the credit crunch.  For example the New Jersey Main Street Business Assistance Program guarantees a lines of credit up to 50%.

You can check what's going in your state by visiting the Recovery.gov site.

BusinessWoman,

There does not appear to be anything in the President's plan or the stimulus that specifically mentions helping those with low credit scores, however, the intended purpose of this plan is to open up credit markets in order to provide financial assistance to struggling businesses.  Historically, borrowers of government guaranteed loans had lower credit scores than those borrowing through traditional lending channels.

I recommend contacting one of SBA's District Offices.  Experts there can refer you to one of SBA’s resource partners who have business development experts who can tell you the steps you can take to repair your credit so you are able to qualify for a loan.

Message Edited by BobK on 03-18-2009 07:45 PM

[#5]

Will the 90% SBA guarantee on business loans include 504 loans?  

If so, has the 10% down payment been lowered for the borrower?

Will this plan have any affect on lowering interest rates on SBA guaranteed loans?

[#6]

No the 90% g'tee is only on the 7(a) program for loans up to $1,666,00.

As far as I know the 10% equity requirement is still in effect. Somewhere down the road, the 504 program will be able to be used to refinance debt. I don't know how the 10% equity rule will be applied there if at all.

The current maximum rate on most 7a loans is 6%, which is WSJ prime plus 2.75% adusting no more often than monthly. I don't think the plan will change the maximum rates, but the banks can offer you a lower rate if they think you qualify and the risk is less.

[#7]

Maybe, the government should STOP HELPING THE BANKS, and instead start dealing with Small Business owners directly...how many BILLIONS (TENS OF BILLIONS) have been given to the Citi Bank, JP Morgans, Bank of American, HSBC, Duestch Bank( in Germany...they got 12 Billion of the AIG funds) of the world, and how much BETTER SPENT would that money have been making loans directly to the Small Business Entreprenuers? 

(Not one TOXIC asset was bought with all our money)  I could have bought up every TOXIC MORTGAGE, refinanced the homes at 4 percent interest for 30 years, and had what....1.6 TRILLION to use in stimulating the economy through Direct LOANS/GRANTS to the Small Business Community.

Instead, Obama continues using the same failed policy of TRICKLE DOWN ECONOMICS that got us here.  Let's be honest....most of what the President is doing is aimed at helping so called Small Business that is NOT SMALL BUSINESS.  Tell us Mr and Ms Moderator what Obama has on board RIGHT NOW to make AFFORDABLE CREDIT available to say small businesses that need under $50K. How many Small Businesses could create a lot more jobs if their credit line was not with Ameircan Express at 18 percent interest?

We need a paradigm shift, and so far this web site is failing to deliver on that need.  If you have access to Mr. Obama's ear, tell him to GIVE REAL PEOPLE a seat at the table...the President of Caterpillar is NOT THE VOICE of Small Business America.  How can our nation help the Small Business Community when they get their marching orders from the likes of Mr. Buffett, Bill Gates  and the National Chamber of Commerce that has a Pro-BIG BUSINESS cheap labor, guest worker, AMNESTY agenda that is bad for small business.

Cosmic Rabbit

Green Nuclear Underground

Message Edited by NicoleD on 09-30-2009 12:51 PM

[#8]

Yikes, Cosmic Rabbit.  Don't shoot the messenger.  We're just an information service set up to help small businesses understand what's available from their government to help start, manage and operate their businesses.  We aren't part of the political process.

[#9]

Right on Cosmic Rabbit!!!

   How about some real help for small business. How about a great % rate for a loan!  Like 3.00% sound crazy..... Its not .. how about spurrrring  some real growth in this great USA .... why not cut taxes .... wow! 

We are one of the highest taxed countries in the WORLD

Is it a wonder that business leaves this country?

No it is not... (you have to make a buck)

Its about being profitable when you are in business.

That ability to make a dollar and be able to hang onto it $$$

NOT TO BE TAXED TO DEATH...

Give us back our money that we make... CUT TAXES .. Get off my dollar!  get out of my pocket! 

That will keep business here! In the United States of America!

That will grow business here! In the United States of America! 

That is the bottom line. Its as plain as the nose on your face! 

[#10]

A 7(a) loan can be used for real estate, Equipment with up to 25 year terms and working capital with up to 7 year terms.

Can a business get both a real estate loan and a working capital loan?  I would like to refinance the current assets, Machine Shop equipment (turning centers, machine centers etc) and include the buying of land and constructing a new building.  I currently rent. 

I would also like to get a working capital loan to get me through the middle of next year.  This assumes the business economy will remain slow thru the middle of next year. 

Thanks

[#11]

What my small business needs is working capital to get thru the lack building phase.  By our state using the stimulus money for road construction that does not help out people you supply building materials for building.

[#12]

I strongly believe the US Treasury should start lending directly to small businesses.  Banks are hording cash to bolster their balance sheet to hedge against a worsening in the economy.  As such they are very reluctant to loan to small businesses.

[#13]

Nevertheless, investors have been reluctant to purchase these loans.  This has a meaning that banks have not been able to make as many small business loans. It is an evident fact.

Academic papers

Message Edited by NicoleD on 09-30-2009 12:55 PM

[#14]

As a measure to unfreeze the secondary credit market, the President announced the U.S. Treasury will invest up to $15 billion in securities backed by SBA loans. It is an excellent action I must say. Governments must invest money in security organizations.

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Message Edited by NicoleD on 09-30-2009 12:55 PM

[#15]

Obama is doing great and it is good idea to boost the small business and it will help the people who have low income and want to try to do business.

Locksmiths

Locksmiths

Message Edited by NicoleD on 08-26-2009 12:46 PM

[#16]

Im on a government program called the New Enterprise Incentive Scheme, here in Australia. It has helped me alot, we get income aswell as our own mentor to help with business activities.

Regards,

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[#17]

I'm trying to understand the 378 Million figure in light of small business size standards as outline in this table of business size standards.

Is there current publicly available reporting of what industries have received what percentage of SBA loans in the past?

[#18]

Wow this is a great thing. I noticed this was done a long time ago 10 months ago it looks like. Have you found any sign that this has helped any? I have high (really high) hopes for 2010. I think it's going to be a good year and the economy will start turning around. I've heard many people are very optimistic.

--------

 Justin

shipping franchise

Message Edited by NicoleD on 01-05-2010 04:43 PM

[#19]

Kudos to CosmicRabbit - he nailed it! I wish I could have read the unedited version of the message.

[#20]

Debt - the message was edited to disable a hyperlink that pointed to a commercial website.