Unsecured Small Business Loans - Good News - Stimulus Bill Allows SBA 90 Percent Guarantee For Loans
Anyone remotely involved with small businesses, whether as a consultant, lender, supplier, leasing specialist, trade association, or simply as a consumer who is tired of driving by sections of town and wondering why your favorite business unceremoniously threw in the towel, would very much like to hear some good news. Not to mention the small business owner itself. After all, there are 27 million small businesses that deserve to be thriving in this nation, but too often were ignored by the Bush administration. Classically non-complainers by nature, they just want a scrap of hope thrown their way. And I'm not talking about wide-eyed idealists looking for handouts-in all due respect to Emily Dickinson, they're not looking for the"thing with feathers that perches in the soul". Just give us a few bucks and we will run with it. This is a continuing article (20 in all) on the subject: Help. Is anyone out there loaning to small businesses anymore?
Fortunately there is a loan program out there and SBA lenders are actually making loans currently: the Community Express Loan Program. This gives unsecured small business loans between $5,000 and $50,000 with very little paperwork, answers typically in two days, interest rates presently at 7.75%, funding and two weeks, and monies wired directly to your business account. There are still lenders participating in this program, although Congress has failed to make the program permanent and still has a 10% cap on the number of loans.
Enter the Obama stimulus bill. Let us look how it affects this program and small business lending as a whole.
If you have tried to wade through the 1,100 or so pages of the new stimulus bill (American Recovery and Reinvestment Act of 2009), you know its like chipping through granite. But let me pull out a little gem. It now allows the U.S. Small Business Administration (SBA to you) to guarantee up to 90% of loans made by private lenders under their program. Let me explain. This is great for Community Express.
When the Small Business Act was enacted in 1958, it had a very simple mission. Find a way to get loans to small businesses that couldn't get them through traditional channels. It did this in an ingenious way. They knew banks where reluctant to loan to small businesses, especially startups, because of fear of failure. So the SBA collected a fee on each loan and used this as a fund to pay banks if there was a default. Bingo, there was invented the SBA guarantee fee. It doesn't take a degree in rocket science from MIT and an MBA from Harvard to know this gives incentives to the banks to make more loans.
SBA loan programs have guarantees from 50% to 85%. Specifically, the SBA currently has an 85% guarantee on loans up to $150,000 and up to 75% on loans above $150,000. On the other hand, there are some programs that only go as high as 50%, including the Express Loan program (for those types of loans the new guarantee will not change). With the new stimulus bill, the SBA has the right to increase these fees to 90%.
Think about this for a moment. Simple math tells us more guarantee, the greater the likelihood of the bank making the loan. For goodness sakes, 90% is tapping on the door of a 100% guarantee! Also note the guaranteed portion is typically sold on the secondary market (which has recently shut down to almost nothing) so there is more chance for loans to be sold and more money to go back into the coffers of the banks for further lending.
Notice I said the SBA has the right to increase it to 90%. It can pick which program. And it has not occurred yet. But if I was a betting person, I would say they would be seriously looking at most of the programs because everyone is scraping for ideas to revive the economy.
For those addicted to primary source documents, this is what the new statute, in relevant part (my attorney wanted me to add that) says:
SEC. 502. ECONOMIC STIMULUS LENDING PROGRAM FOR SMALL BUSINESSES. (a) PURPOSE- The purpose of this section is to permit the Small Business Administration to guarantee up to 90 percent of qualifying small business loans made by eligible lenders.
(b) DEFINITIONS- For purposes of this section:
(1) The term 'Administrator' means the Administrator of the Small Business Administration.
(2) The term 'qualifying small business loan' means any loan to a small business concern pursuant to section 7(a) of the Small Business Act (15 U.S.C. 636) or title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 and following) except for such loans made under section 7(a)(31).
There is also a sunset provision under Subparagraph (f) that the guarantees are only good for one year after enactment of the bill, unless extended by Congress.
So what does it do for me now as a small business owner? Well now the not so good news. I predict the SBA will be increasing many of its programs to 90%. But to get the banks in the lending mood again, there has to be a secondary market. There is also new legislation on that, which we will discuss in another article. But once we have a secondary market, I predict that they banks will not only loan, but do so in a big way. For three reasons:
First, history tells us when there is economic inactivity due primarily to depressed conditions, when the cycle changes for the better, like a sling shot affect, it changes dramatically. Remember when people were unable to refinance or purchase their homes because of tight markets and high interest rates? The rates went down and many jumped at the chance to refinance, improve their homes, and purchase (some say too precipitously) with abundance. Although this is an overstatement and also depends upon other factors such as employment, standards of living, etc., the analogy holds that when things loosen up, there will be a substantial number of business loans.
Secondly, banks are in large part in the business of making loans and they have not been doing so for some time. They will be anxious to make profits again.
Lastly, simple economics tells us when there is a vacuum in the market; capital will rush in and take advantage of that open market and initial lack of competition. Large banks are not making business loans so small community banks are starting to rush in to take over the arena. Give them a secondary market and they will explode.
So for the small business owner, I think this news of 90 % guarantees is favorable. Why did it take them so long?
Friday, September 14, 2012
Saturday, September 1, 2012
Davey Jones Costume - Child Costume - Large (10-12) Guide
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Item Sizing: The size guide found below is specific to the costume in this listing. Other costumes may have different sizing patterns. For example, company A's size medium may be equivalent to company B's size large. Be sure to check the size chart closely to make sure you know what you are ordering. The list below may indicate that more than one size fits you. If you are unsure of which size to choose, then go with the larger size because these costumes may tend to run small.
Measurements are stated in inches.
Size X-Small | Chest 22-23 | Waist 21-21.5 | Height 39-42 | Age 3-4 yrs
Size Small | Chest 23-25 | Waist 21-23 | Height 39-47 | Age 4-6 yrs
Size Medium | Chest 26-27 | Waist 23-24 | Height 48-54 | Age 7-8 yrs
Size Large | Chest 28-30 | Waist 24-25 | Height 54-58 | Age 9-10 yrs
Size Large Plus | Chest 32-33.5 | Waist 29-30.5 | Height 54-58 | Age 9-12 yrs
Size X-Large | Chest 30-32.5 | Waist 26-27 | Height 59-62 | Age 11-12 yrs
Size One Size | Chest | Waist | Height | Age 4-12
Item Color(s): This item's color(s) may vary due to inherent variations manufacturing dye application or your computer monitor's color settings.
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Friday, August 31, 2012
KISS Starchild Full Mask On Sale
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KISS Starchild Full Mask
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Thursday, August 30, 2012
One Size Men's Arabian Sheik Costume (Size 40-44) On Sale
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Men's Arabian Sheik gown is a great outfit for any Christmas or Easter performances. This costume is made with the best quality. Machine wash cool water and tumble dry low. Knife and sandals not included, One size fits most men 40-44.
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Tuesday, August 28, 2012
Plus Size Baroness Women's Costume Guide
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Our adult plus size Baroness dress is a great period costume dress for any full figure lady. This elegant plus size costume is ideal for theatrical productions or as a nice adult Halloween costume.
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Playboy Touchdown Tease - Small - Dress Size 6-8 Reviews
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Set includes dress with flared skirt, screen print front/back, web belt and sport socks. Please note: This item's color may vary due to inherent variations manufacturing or your computer monitor's color settings, however the item you receive will be identical or substantially similar to the item pictured in this listing.
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Monday, August 27, 2012
Wizard Of Oz Secret Wishes Glinda The Good Witch Costume,Pink,Plus On Sale
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