2009 American Recovery & 2009 American Recovery & Reinvestment ActReinvestment Act

SBA UpdateSBA Update

Nationwide effort to:•create jobs

• transform our economy

PLAN is to grow our economy :• by jumpstarting job creation

•re-starting lending•investing in small businesses.

The Recovery Act:comprehensive package of

•tax breaks,• financial assistance

•and market enhancements

$730 million The SBA’s provision in the Bill

To Increase access to capital for small business

•$375 million:•temporary fee reductions•increased SBA guarantee up to 90%

•$255 million ARC Stabilization Loans• New SBA loan program to help small businesses meet existing debt payments

•$30 million to expanding Micro loan program• enough to fund up to $50 million in new lending

NINE COMPONENTS OF BILL

1. Temporary Elimination of Loan Fees

2. INCREASE SBA Guarantees to 90%

3. 7(a) Secondary Market Liquidity

4. ARC Stabilization Loans

5. Expanded Microloans

NINE COMPONENTS OF BILL(cont.)

6. Surety Bond Program Expansion

 

7. Create a Secondary Market for

504 First Mortgages

8. Expanded 504 Refinancing Project

9. SBIC Program Expansion

Fee Reductions• Eliminates borrower fees on SBA’s

7(a) long term loans as well as both borrower and lender fees on the 504 Program

• Fee elimination does not apply to loans with a maturity of less than 12 months.

• Fees paid since February 17, 2009 will be refunded by SBA. Expected date is after May 1, 2009.

Lenders must reimburse fees paid by borrowers on eligible loans.

• 90% guarantee on most SBA loans – SBAExpress in not included

• Loans greater than $1,666,666 will only have a $1,500,000 guaranty.

• These program improvements are only expected to last until the end of the year.

Maximum Guaranties

Maximum Guaranties

Loan Program Max. loan Max. guarantee $

FULL 90% Guaranty • Lender Advantage $ 350,000 $ 315,000• Community Express $ 250,000 $ 225,000• Patriot Express $ 500,000 $ 450,000• Export Express $ 250,000 $ 225,000• Gulf Opportunity $ 150,000 $ 135,000

90% Maximum Guaranty up to :• Standard 7(a) $ 2,000,000 $ 1,500,000• CLP $ 2,000,000 $ 1,500,000• PLP $ 2,000,000 $

1,500,000

Up to 90% Guaranty

7(a) Secondary Market Liquidity

The Recovery Act allows SBA to reinvigorate the secondary

markets for SBA loans.

RESULTS:– Increase bank profitability – Encourage banks to make more

small business loans – Increase greater access to credit

for small business

ARC Stabilization Loans Brand New SBA Program to give small

businesses some temporary financial relief to keep their doors open and get their cash flow

back on track create new jobs.Loans up to $35,000

– Viable small businesses that need help making payments on an existing, qualifying loan for up to six months.

SBA loans made before Feb. 17 not eligible•Deferred-payment

– Repayment does not begin until 12 months after the loan is fully disbursed.

•100% guaranteed by the SBA

Expanded Microloans

Increased funding to theSBA-backed MicroLoan Program

•Micro-Loans can be up to $35,000 •Enough funding from SBA to generate up to$50 million in new SBA-MicroLoans

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For a more information anda list of micro lenders go to

www.sba.gov/va Look for The MicroLoan Program and

Click on the nonprofit intermediaries link

• 6. Surety Bond Program Expansion Increasing Surety Bond Limits will help small businesses compete for the billions of dollars

• 7. Secondary Market for 504 SBA to establish a process for the private sector to apply

for federal guaranty on pools of 1st lien 504 loans.• 8. Expanded 504 Refinancing Project

to restructure and refinance existing loans into SBA-

backed 504 loans. • 9. SBIC Program Expansion

SBA working on regulations that they will requiredSBICs to invest 25 % of their financing dollars in “smaller” enterprises

““The Recovery ActThe Recovery Act”” (cont.)(cont.)

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HOW TO APPLY?HOW TO APPLY?SBA Guaranteed Loans are BANK LOANS

Apply Directly to a participating SBA LENDER

To find a lender go towww.sba.gov/va

Click on the “financing” linkAnd look for: Preferred, SBAExpress,…....Lenders 

To see who the active SBA lenders are:scroll to near the bottom of the finance page and look for

KEY SBA LENDER WEBSITES &INFORMATION: Loan Volume by Lender:   FY 2009 YTD through Feb. 28;

HOW TO APPLY?HOW TO APPLY?

To find a lender go towww.sba.gov/va

Click on the “financing” linkAnd look for: The CommunityExpress Loan Program

And click on thetechnical and management assistance link

Community Express Loan ProgramCommunity Express Loan Program

Contracting Opportunities

SBA UPDATES

• Change in GC Area office location• E-Verify• GAO decisions• eSRS• Rothe Decision• Recovery Act – Blanket Waivers• HUBZone & 8(a) Program Updates• Small Business program parity• Processing of 8(a) Offers

Questions?

Thank you!