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Small-business loan measures extended

Posted: January 12, 2011 11:01 p.m.
Updated: January 13, 2011 4:55 a.m.
 

The Small Business Jobs Act of 2010 enhanced loan packages and terms for small businesses. Included in the act were improved loan provisions, such as a 90-percent guarantee and reduced fees for small-business owners securing loans.

The law also provided smaller community banks with low-cost capital, as low as 1 percent, if they exceeded 2009 small-business lending levels.

In late December, the Senate and House passed a short-term measure to extend SBA lending incentives, including SBA fee waivers and higher guaranties for 7a loans through March 4, or when funding is exhausted.

The law increased the maximum amount of these loans to $5 million.

The 7a loans are said to be more flexible than 504 loans and are considered to be very profitable for banks.

The 504 loans have long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.

According to the SBA, based on self-reported data, a significant share of the Jobs Act loans went to rural (22 percent), minority-owned (21 percent), women-owned (16 percent) and veteran-owned (7 percent) businesses.

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