SBA 7a loans will increase from a maximum of $2 million to 5 million. It will also eliminate the SBA guarantee fee through the end of the year! See article below and call JCG today if you are looking for a loan…
Senate passes small-business bill
South Florida Business Journal – by Kent Hoover Washington Bureau Chief
The Senate on Thursday passed legislation that aims to increase lending to small businesses and provide them with $12 billion in targeted tax breaks.
The Small Business Jobs Act was approved by a 61-38 margin, with two Republicans — Sen. George Voinovich of Ohio and Sen. George LeMieux of Florida — joining Democrats in support of the legislation. Until this week, Republicans had voted in unison to block the bill from being considered.
The House passed a different version of the legislation in June, but House Speaker Nancy Pelosi said her chamber would quickly approve the Senate version in order to get the bill to President Obama’s desk as soon as possible.
“This is a real step in putting this recession behind us,” said Sen. Mary Landrieu, a Louisiana Democrat, who chairs the Senate Small Business and Entrepreneurship Committee.
Politically, it gives Democrats a much-needed legislative victory on an economic issue before the Nov. 2 congressional elections. Small businesses historically have led the U.S. out of recessions, but they’ve been slow to hire more workers this time around. One reason may be problems accessing credit — a recent survey by the National Small Business Association found that 41 percent of small-business owners haven’t been able to obtain adequate financing.
The Small Business Jobs Act would help small businesses get more loans by providing up to $30 billion in cheap capital to community banks for use in making small-business loans. It also would provide $1.5 billion to state-run small-business credit programs.
“This is a pivotal step toward aiding Main Street America’s economic recovery,” said Jim MacPhee, CEO of Kalamazoo County State Bank in Schoolcraft, Mich., and chairman of the Independent Community Bankers of America.
ICBA estimates community banks will leverage the $30 billion in capital from the federal government into $300 billion of new loans to small businesses.
The legislation also would boost U.S. Small Business Administration loan programs by increasing the government guarantee on the SBA’s flagship 7(a) loans to 90 percent and eliminating borrower fees on 7(a) loans and 504 loans, which primarily are used for real estate. These breaks, first instituted as part of the economic stimulus bill, revived SBA lending because they made the loans less risky for lenders and more affordable for borrowers.
The higher guarantee and fee waivers expired at the end of May, however, and SBA lending has fallen dramatically since then. The bill would renew these breaks through Dec. 31.
The bill also would increase the size limits on SBA loans, making them more useful for larger small businesses. The maximum size for 7(a) loans, for example, would be $5 million, instead of the current $2 million.
The legislation provides temporary tax incentives for businesses to invest in new equipment, allowing businesses of all sizes to write off 50 percent of the cost of new equipment immediately, instead of depreciating it over time. Small businesses would be able to expense up to $500,000 of capital expenditures, double the current limit under Section 179 of the tax code.
Most small-business groups supported the legislation, but the National Federation of Independent Business said the bill will provide only limited help.
“While the bill passed today will help some small businesses that either qualify for the specified tax breaks or qualify for new loans, it falls short of addressing the most significant problems facing all small-business owners — lack of sales and uncertainty,” said NFIB Senior Vice President Susan Eckerly.
Republicans had blocked the bill because they were denied the ability to offer the amendments they wanted. Many also opposed the $30 billion lending fund for community banks, contending it was just another version of the Troubled Asset Relief Program.
Voinovich said he remained “disappointed that my colleagues were unable to offer amendments to this bill,” but he “felt we could no longer wait to pass this legislation. We needed to do something now to help the economy get going.”