I’ve been waiting and watching most of the summer, and I’m excited I can finally announce that the Small Business Jobs and Credit Act (HR 5297) has passed both the House and Senate. The bill now goes to President Obama for his signature, and I fully expect this will become law in a matter of days.
There’s been a lot of talk about what’s in this bill and what effect it will really have on small businesses. Some people think it’s a good and helpful step toward creating jobs and getting our economy back on track, while others see it as another publicity-stunt-bailout-measure that will do little more than get positive press for the White House. I happen to fall under the former category, partially because a portion of this legislation directly affects my business and the business owners who are our Clients and will become our Client in the future.
Once this bill becomes law, it will be possible to refinance commercial debt with SBA 504 loans. Business owners across the country will be able to tap the embedded equity in their commercial properties, giving them access to capital that will help them not only keep their businesses afloat, but also help them grow.
In addition to this provision, there are several other immediate benefits for small business owners in this bill that you ought to know about. Here’s a brief run-down of these:
Permanently increases of SBA 504 and 7(a) loan eligible dollars to $5 million ($5.5 million for manufacturers and “green” projects).
Increases the size standards for SBA 504 loan and 7(a) loan eligibility (tangible net worth increased to $15 million and two-year average net income increased to $5 million).
Appropriates $505 million for SBA loan fee abatements.
Extends the SBA 504 secondary market program for first mortgage guarantees for two years from the date of the first sale (expected any day now).
Temporarily increases the 7(a) loan program guarantee to 90% (until January 1).
Establishes a $30 billion fund to direct money to participating community banks on the condition they lend it out to small businesses.
One of the problems with legislation like this is that it’s sometimes hard to understand exactly how certain pieces of it are actually helpful and even what they do. Next week, I’ll post a series of videos explaining each of the above provisions, as I want you to benefit from this new law to the fullest extent possible. So, be sure to check back here for all the details about how this affects you and your business. Until then, I hope you have a great and relaxing weekend. You deserve it.
Dedicated to Your Continued Success,