By G. Alan Sieve
The Tennessee district director of the U.S. Small Business
Administration praised Congressional action to boost lending to small businesses and stimulate job creation at the annual meeting of Areawide Development Corporation, Alcoa, which was held last week at Egwani Farms Golf Course in Rockford.
A not-for-profit corporation, ADC markets SBA Section 504 loans for capital improvements to area banks and helps process the loans.
Walter Perry, SBA district director acknowledged banks have been holding back on lending and said that several provisions of the Small Business Job Act of 2010 should help SBA lending.
Perry said at the Tuesday meeting that Congressional approval might come this week. He noted the U.S. Senate had passed the bill Sept. 16 and sent it back to the House, which had passed another version in June. The House subsequently passed the Senate version Thursday afternoon. It next goes to the president for his signature.
A summary of the bill notes it will create a $30 billion loan fund and allocates $500 million for SBA loans. Perry noted the amount that the SBA could loan individual businesses for working capital would be raised from $2 million to $5 million, and the loan limit on Section 504 loans for capital improvements would be raised from $1.5 million to $5 million.
Don Woods, ADC director, added that it appeared that the bill would have some enhancements for Section 504 loans, including refinancing possibilities. One such enhancement would allow Section 504 borrowers who had significant equity to borrow money through the program for working capital, which they hadn’t been able to do before.
“For some of our older businesses, that could be a great help,” Woods said.
Perry added the bill would extend a 90-percent loan guarantee to participating banks. That had been part of earlier stimulus legislation but had expired May 31. The bill would also eliminate some lending fees, he added.
“You’ve some things in the bill that we’re seeing Main Street can use because it gets capital flowing again, and that’s what we want to do,” he continued. “Two out of three new jobs created are coming from small businesses.”
Tennessee SBA director applauds new jobs bill
By G. Alan Sieve