The American Recovery and Reinvestment Act of 2009, which is the Obama administrations’ stimulus bill, has provided a lot of funds to small businesses by increasing the funding for the Small Business Administration or the SBA. The SBA operates through private licensed lenders, mostly banks, to disburse this money. So if you are a small business and do need loans, contact the SBA section of your local bank.
The bank will provide you SBA loans for your business. The loans need not be secured for amounts between $5,000 and $50,000, and the paperwork is minimal, with loans being made available in two weeks. Interest rates can be as low as 7.75%.
The loans are called SBA loans because the Federal government reimburses to the lenders a certain amount of defaulted loans, thus providing a safety net for the lenders and thus giving an added incentive for them to do this business. There is however a cap on the number of loans that each lender can make.
Under the new Act, additional funds have been made available to the SBA for reduction of fees which the SBA normally charges a borrower. Funds have also been allocated to help provide loans to small businesses to meet existing debt repayments. You can thus refinance a debt that is secured by any real estate or other assets that you have.
Micro lenders have also been provided with technical assistance. They are given blocks of money, which they then re-loan as micro loans to small businesses at higher rates of interest. These micro loans are generally covered by assets.
Assistance is also being provided to the SBA to speed up the induction of technology into the loan giving process so that processes are more efficient, faster and transparent. SBA also provides a security bond guarantee program which will help a small contractor to provide the necessary bonds or guarantees that are required when he bids for a project.
A sum of $730 million has been provided to the Small Business Administration to fund these various programs, and it is hoped that this will provide the necessary stimulus to all small businesses. All these schemes operate through verified lenders and information on all the schemes is freely available on the net.
It is unfortunate that along with the stimulus package, a new business has taken root, in which these new entrepreneurs guarantee loans for your small business. They will offer you driblets of information all of which is freely available on the net, and even charge you for this information. In case you are a small business and are looking for a loan, contact the SBA in your area or your local bank if it has a SBA section. You can get all this information, select the scheme you want to enlist in and make all the applications and submit the required paperwork, so that you get the required loan.
The stimulus package now made available by the Federal government is aimed at increasing the access to loans by small businesses. It is doing this through banks and certified lenders and making it easier for them to give loans by increasing the guarantees. These guarantees are paid out if the small businesses defaults on payments.
