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SBA Statement on Small Business Lending Steps Announced by President Obama

Thursday, April 2, 2009   (0 Comments)
Posted by: Megan Markoff
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U.S. Small Business Administration

-- News Release --


Release Date:  March 16, 2009 
Contact:  Mike Stamler (202) 205-6919
Release Number: 09-17 
Internet Address:

Statement from SBA Acting Administrator on Recovery Efforts Announced by
President Obama Today

WASHINGTON – The following statement was issued today by Acting
Administrator Darryl K. Hairston of the U.S. Small Business Administration
following the announcement by President Barack Obama of important steps
being taken by the SBA and the U.S. Department of Treasury to address the
economic challenges facing small businesses and entrepreneurs across the

“U.S. small businesses employ about half our nation’s workers and over the last
decade have created about 70 percent of all new jobs.  But their access to
credit and lending markets has dried up, making it harder every day for small
businesses to keep their doors open and their employees working.  American
small businesses are one of the strongest engines for economic prosperity in
the world, and we can’t let this crisis continue to undermine their growth and
potential.  Today President Obama reiterated his belief that we owe it to
America’s small businesses to be the partner they need in the midst of this
crisis.  At SBA, we couldn’t agree more.

“SBA this week is implementing two key provisions laid out in the Recovery
Act – we are temporarily eliminating certain loan fees and raising guarantees
on some 7(a) loans up to 90 percent.  With these critical steps by SBA, and
the Treasury Department’s commitment of up to $15 billion aimed at getting
lending markets flowing again, we are standing up with small business owners
across this country and telling them how we are going to put much-needed
capital in their hands.

“We hope small businesses will take the opportunity to ask their banks about
the SBA loans that might be available to them.  And, we encourage community
banks and other lenders to work with us to reach as many qualified borrowers
as we can during these difficult times.”

Beginning today, the SBA will:

• Temporarily raise guarantees to up to 90 percent on SBA’s 7(a) loan
program, through calendar year 2009, or until the funds are exhausted.  This
increase in guarantee levels will help provide banks with the greater
confidence they need to extend credit during the current recession, will mean
more capital available to small business owners around the country.

• Temporarily eliminate fees for borrowers on SBA 7(a) loans and for both
borrowers and lenders on 504 Certified Development Company loans, through
calendar year 2009, or until the funds are exhausted. This will mean more
capital available to small businesses at a lower cost.  The fee elimination is
retroactive to February 17, the day the Recovery Act was signed.  SBA is
developing a mechanism for refunding fees paid on loans since then.

Additionally, the President announced today that the Treasury Department will
commit up to $15 billion to help unlock the frozen credit markets by purchasing
small business loan securities currently frozen on the secondary market. By
purchasing these securities, it will unlock these secondary markets, and in
turn, free up more capital to jumpstart lending for small business owners. The
SBA has worked closely with the Treasury Department to address the need to
unlock these secondary markets for SBA loans.

For more information on the SBA and Treasury initiatives announced today by
the President, visit the SBA Web site at

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