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How will the Small Business Jobs and Credit Act help your business?
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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,

Chris

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18 Comments

  1. george lulias says:

    george lulias:This is wonderful.Excellent! thank you forthe update. I will do some homework, Please keep me update, than you.

    • george lulias says:

      I like to know and learn more about helping small businesses.

  2. Steve Pickering says:

    While the Small Business Jobs and Credit Act may benefit a small number of businesses, its primary purpose is to bolster the political fortunes of a Congress and Administration that have been silent too long in the small business arena.

    Small businesses and start-ups that receive government-sponsored business loans are a small fraction of the small business universe. Announcing billion-dollar loan programs are very newsworthy affairs, so politicians tend to love them. The current political power trust likes loan programs even more because they equate giving money away to political power.

    It’s unfortunate that there are no entrepreneurs, small business people, or corporate executives involved in the Obama administration, and very few in Congress. Were there more representation of small businesses in Washington, perhaps we would see more support for reduction of individual and business tax burdens, and a reversal of the ever-increasing regulatory environment.

    • Steven says:

      I thought Warren Buffet was “involved” with the Obama administration.

  3. Gary Rudsinski says:

    Do I hear a big AMEN!!!!

  4. Ira Stern says:

    Getting on a flight to Las Vegas. My daughter is competing in Ms. Olympia contest tomorrow. Going in, she is ranked #2 in the world.

    Hopefully we will come back with the trophy.

  5. Chris Hurn says:

    NICE! Best of luck to her! I’ll try to keep my distance from her when I’m in sight of any arm-wrestling tables. :)

  6. MARTIN PASSANTE says:

    THIS SOUNDS GREAT BUT MOST BANKS DONT LIKE THE LOW RATE

  7. Chris Hurn says:

    I don’t disagree with what you’re saying, Steve, but this is at least a small step in the right direction. Before this legislation, Washington had all but forgot about small business in America — choosing to mention it only when they can score political points.

    Stay tuned for a video we’re working on that speaks directly to what you’ve said above — should be out in a few weeks, right before the election. Just promise me you’ll be sure to distribute it EVERYWHERE once we put it out there. I think you’ll agree that we’re pretty BIG advocates for America’s small businesses!

  8. Ken Pokorny says:

    Thia is great news for most Business Owners planning to sell and for those buyers looking to get into a business opportunity. I am a business broker in Dallas and have a few deals that are favorably impacted by this bill. I wish they would have raised the goodwill amount to $1M. The current $500K goodwill maximum requires more injection (down payment) and a seller note as part of the deal that could carry out for many years. It doesn’t bode well for those who are trying to retire and sell their business with goodwill over $500K. The seller note terms are like an annuity with no guarantee.

  9. Steven says:

    While businesses and banks are sitting on considerable money, which means, generally, they are not spending or lending. Why? From what I’ve heard from them: “sluggish demand.”
    Though small compared to what’s needed, this Act is a start. The money is intended for small banks and businesses who can then invest, hire and grow, which means stimulate demand; the missing link.
    I hope trickle up works better than trickle down has not.

    • Steven says:

      Correction/Qualification: “While businesses and banks are sitting on considerable money,” mean’t to say, “While LARGE businesses and banks…”

  10. JD Polk says:

    How would one apply for this 504SBA Loan? from local bank or Gov entity?

    • Connie says:

      Apply through your bank. Some banks are better than others at processing these loans. You might try contacting your regional SBA or the extension program at your local community college to ask which banks are actually granting these loans currently. Our lead came from the SBA extension at the local community college in Sanford, Florida.

    • Steven says:

      I think Chris’ blog handle answers that…504 Blog; A Service of Mercantile Commercial Capital.

  11. Greg Hunter says:

    Thanks, Chris! It was great talking you a few weeks ago and catching up. Please keep me posted on that event at National Harbor you spoke about I believe in Oct. 2010. This is some very good information to know and learn more about as it relates to helping small businesses!!

    Keep up the outstanding work!

    Greg

  12. JEAN-PAUL GEROSA says:

    Thanks.

  13. Randy Ragonese says:

    Super article, Was so bored, this article made my night! LOL at some of ya people!

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