Recent policy changes with SBA are a mixed bag of "Hit" and "Miss".
"Hit": SBA at the last moment, approved an extension of the soon expiring fee waivers and higher loan guarantees. The Small Business Jobs Act was to expire 12/31/2010. It has now been extended thru March 4, 2011.
"Miss": What is not "common knowledge", is that the "funds" for the extension will most likely be EXHAUSTED very soon.. most think by 12/31/10! So what was the point? Perhaps it will allow just a few more applicants to benefit from fee waivers. Most will miss the deadline/exhausted funds.
"Miss": On September 29,2010 (3 months ago), SBA FINALLY changed the rules to allow business owners to refinance their commercial real estate with the SBA 504 fixed rate loan program. This was a HUGE victory for small business owners. So why is it a "miss"?... because we are STILL WAITING for SBA to publish the rules! This means that lenders cannot process any refinance loans until SBA gets it together!!
Lots of lip service from SBA right now! Lenders and small business owners NEED to utilize this program today!
I believe that SBA will "hold off" on publishing the rules, until the Small Business Jobs Act funds are exhausted. Why? Because then, the business owner will have to pay the FEE to SBA (which is currently being waived)! Does not make sense to lenders or small business owners, but I guess it makes sense to SBA and Congress.
Stay tuned... or better yet... demand Congress and SBA to implement the SBA 504 refinance rules NOW!!
Thursday, December 23, 2010
Wednesday, November 17, 2010
2011 SBA Lending
We anticipate 2011 to be bullish for SBA lending.
The highly anticipated refinancing changes to the SBA 504 loan program should be published by January. We are very optomistic that this one change to the 504 program will return common sense to commercial real estate lending.
It will allow owner/users of commercial real estate to refinance out of a note that is being ballooned or has higher interest rates.
I am anxious to be able to help so many here in Central Oregon!
Stay tuned!
The highly anticipated refinancing changes to the SBA 504 loan program should be published by January. We are very optomistic that this one change to the 504 program will return common sense to commercial real estate lending.
It will allow owner/users of commercial real estate to refinance out of a note that is being ballooned or has higher interest rates.
I am anxious to be able to help so many here in Central Oregon!
Stay tuned!
Friday, September 24, 2010
SBA Fee Waivers back in play, plus more!
After much anticipation, Congress has passed the bill to support small business loans! Here is a quick preview of the changes. After the bill is signed into law, the SBA will implement. As soon as we lenders get the published SBA policy change, we WILL be able to do more loans!
• Fee Reductions - - extends the authority for 7(a) and 504 fee reductions and 90% 7(a) guarantees through December 31 or until $505 million in appropriations is obligated.
• Maximum Loan Amounts (permanent increases) - - the loan maximum on:
o 7(a) loans set at $5 million gross and $3.75 million net (or guaranteed amount).
o 504 loans, including public policy loans, set at $5 million, except small manufacturer loans and energy loans are set at $5.5 million.
• Maximum Loan Amount of SBA Express (temporary increase) set the maximum amount of an express loan at $1 million for 1 year.
• Division of Large Loans - - upon request of a loan pooler, SBA will divide a large loan into $500,000 increments for inclusion in separate pools.
• Dealer Floor Plan Financing - - new financing program for dealers for cars, RVs, boats and manufactured homes, but sunset September 30, 2013.
• Alternative Size Standard - - pending SBA establishment of an alternative applicable to both 7(a) and 504, establishes a standard of maximum tangible net worth of $15 million and 2-year average net income after Federal income tax of $5 million which will apply to both programs.
• International Trade Loans - - makes numerous changes in international trade loans, including working capital, primarily permanent loan size increases to $5 million and 90% guarantees and making the export express program permanent.
• Debt Refinancing - - establishes a temporary 2-year program of business debt refinancing through the 504 program independent of the usually required job creation/preservation project.
• Guarantees of 1st mortgage loans - - extends the sunset on the new temporary program for partial guarantees of the bank portion of 504 financing. The program will expire 2 years after the date the first pool sale occurs.
• Fee Reductions - - extends the authority for 7(a) and 504 fee reductions and 90% 7(a) guarantees through December 31 or until $505 million in appropriations is obligated.
• Maximum Loan Amounts (permanent increases) - - the loan maximum on:
o 7(a) loans set at $5 million gross and $3.75 million net (or guaranteed amount).
o 504 loans, including public policy loans, set at $5 million, except small manufacturer loans and energy loans are set at $5.5 million.
• Maximum Loan Amount of SBA Express (temporary increase) set the maximum amount of an express loan at $1 million for 1 year.
• Division of Large Loans - - upon request of a loan pooler, SBA will divide a large loan into $500,000 increments for inclusion in separate pools.
• Dealer Floor Plan Financing - - new financing program for dealers for cars, RVs, boats and manufactured homes, but sunset September 30, 2013.
• Alternative Size Standard - - pending SBA establishment of an alternative applicable to both 7(a) and 504, establishes a standard of maximum tangible net worth of $15 million and 2-year average net income after Federal income tax of $5 million which will apply to both programs.
• International Trade Loans - - makes numerous changes in international trade loans, including working capital, primarily permanent loan size increases to $5 million and 90% guarantees and making the export express program permanent.
• Debt Refinancing - - establishes a temporary 2-year program of business debt refinancing through the 504 program independent of the usually required job creation/preservation project.
• Guarantees of 1st mortgage loans - - extends the sunset on the new temporary program for partial guarantees of the bank portion of 504 financing. The program will expire 2 years after the date the first pool sale occurs.
Monday, June 7, 2010
Meeting today w/ U.S. Rep. Greg Waldon
I am excited today, to be able to meet with U.S. Representative Greg Waldon. He will be kicking off the U-Cut website. I would also like to hear about what can be done to assist small business owners as well!
Friday, April 16, 2010
Problem.. SBA Extends fee Again, and Again
SBA Recovery Act Provisions Extended through May 31, 2010.
Last night the Senate voted 59-38 to extend the Recovery Act SBA loan provisions through May 31 and provided $80 million for 7(a) and 504 fee reductions/waivers and the 90% 7(a) guarantees. Note that the $80 million is twice the amount provided for the April extension.
The original Recovery Act provisions for the SBA loan structure and fee waiver was a HIT, when implemented.
The PROBLEM with these 30 day extensions, is that it does not allow the business owner sufficient time to apply and get SBA approval within the 30 day window. This means that the business owner will not know if they WILL get the fee waiver when they apply. Likewise, the lender has no idea if the 90% loan guarantee will be valid, or if the guarantee will drop back to 75% at the time the BANK APPROVES the loan, vs. when SBA issues the loan number.
I would SUGGEST that SBA stop the practice of 30 day extensions, and actually EXTEND the program thru the end of Fiscal SBA year of 9-30! Wouldn't this make more sense?
Last night the Senate voted 59-38 to extend the Recovery Act SBA loan provisions through May 31 and provided $80 million for 7(a) and 504 fee reductions/waivers and the 90% 7(a) guarantees. Note that the $80 million is twice the amount provided for the April extension.
The original Recovery Act provisions for the SBA loan structure and fee waiver was a HIT, when implemented.
The PROBLEM with these 30 day extensions, is that it does not allow the business owner sufficient time to apply and get SBA approval within the 30 day window. This means that the business owner will not know if they WILL get the fee waiver when they apply. Likewise, the lender has no idea if the 90% loan guarantee will be valid, or if the guarantee will drop back to 75% at the time the BANK APPROVES the loan, vs. when SBA issues the loan number.
I would SUGGEST that SBA stop the practice of 30 day extensions, and actually EXTEND the program thru the end of Fiscal SBA year of 9-30! Wouldn't this make more sense?
Friday, March 26, 2010
SBA Recovery Act Provisions Extended Again
SBA Recovery Act Provisions Extended to April 30
Yesterday new legislation was introduced and passed by the House of Representatives (HR 4938), followed late last night by approval in the Senate.The measure (HR 4938) that extends the Recovery Act SBA loan provisions through April 30: Up to $40 million is available for 7(a) and 504 fee reductions/waivers and the 90% 7(a) guarantees, as well as extension of SBA's authority to provide the higher guarantee (up to 90%).
Yesterday new legislation was introduced and passed by the House of Representatives (HR 4938), followed late last night by approval in the Senate.The measure (HR 4938) that extends the Recovery Act SBA loan provisions through April 30: Up to $40 million is available for 7(a) and 504 fee reductions/waivers and the 90% 7(a) guarantees, as well as extension of SBA's authority to provide the higher guarantee (up to 90%).
Wednesday, March 10, 2010
Senate passage of HR 4213
Just moments ago the Senate passed HR 4213, To amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes -- more commonly called the 'Tax Extenders Bill' to extend jobless benefits, tax breaks... and small business programs.
The bill includes an amendment that increases the amount of funding to further extend the SBA Recovery Act provisions. As part of a technical amendment, the Senate has increased the funding to $560 miliion (in addition to the $60 million for March). The $620 million total should be sufficient to get the SBA lending industry through the end of the CALENDAR year. The bill also includes an extension of the authorization of the SBA Recovery Act provisions through 12/31/2010.
What's next? HR 4213 now goes to the House for consideration. We are hopeful that all congressional work will be completed and the bill signed into law by the March 28 expiration of the recently extended stimulus provisions.
The bill includes an amendment that increases the amount of funding to further extend the SBA Recovery Act provisions. As part of a technical amendment, the Senate has increased the funding to $560 miliion (in addition to the $60 million for March). The $620 million total should be sufficient to get the SBA lending industry through the end of the CALENDAR year. The bill also includes an extension of the authorization of the SBA Recovery Act provisions through 12/31/2010.
What's next? HR 4213 now goes to the House for consideration. We are hopeful that all congressional work will be completed and the bill signed into law by the March 28 expiration of the recently extended stimulus provisions.
Wednesday, March 3, 2010
30 Day Extension of SBA Recovery Act
The Senate has passed a temporary 30-day extension of the SBA Recovery Act provisions with a $60 million appropriation.
The 30-day extension provides for increased government guarantees (up to 90%) and the elimination of the upfront guarantee fee on SBA loans. Before the extension is effective, the bill must be signed into law by President Obama, which should occur within the next several days.
The 30-day extension provides for increased government guarantees (up to 90%) and the elimination of the upfront guarantee fee on SBA loans. Before the extension is effective, the bill must be signed into law by President Obama, which should occur within the next several days.
Subscribe to:
Posts (Atom)
