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?
Friday, April 16, 2010
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