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THE MINUTE
CALIFORNIA BUSINESS MINUTE Unlocking Credit 03-17-09
Hi, I am Tim Johnson and welcome to the California Business Minute.
The SBA is implementing two key provisions laid out in the American Recovery and Rejuvenation Act.
The SBA will temporarily raise guarantees up to 90 percent on SBAs 7(a) loan program, through calendar year 2009, or until the funds are exhausted. This increase in guarantee levels will help provide banks with the greater confidence they need to extend credit during the current recession and will mean more capital available to small business owners around the country.
In addition, the SBA will temporarily eliminate fees for borrowers on SBA 7(a) loans and for both borrowers and lenders on 504 Certified Development Company loans, through calendar year 2009, or until the funds are exhausted. This will mean more capital available to small businesses at a lower cost. The fee elimination is retroactive to February 17, the day the Recovery Act was signed. SBA is developing a mechanism for refunding fees paid on loans since then.
Additionally, the President announced that the Treasury Department will commit up to $15 billion to help unlock the frozen credit markets by purchasing small business loan securities currently frozen on the secondary market. By purchasing these securities, it will unlock these secondary markets, and in turn, free up more capital to jumpstart lending for small business owners.
For more information on the SBA and Treasury initiatives announced today by the President, visit the SBA Web site at .
I am Tim Johnson and this has been the California Business Minute.
