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Small biz jobs bill introduced into Senate

A bill has been introduced into the U.S. Senate that would increase access to capital for small businesses and help create jobs.

U.S. Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., and Ranking Member Olympia J. Snowe, R-Maine, have introduced S. 2869, the “Small Business Job Creation and Access to Capital Act of 2009” that would increase the small business loan limit to as high as $5.5 million and extend for a year the fee eliminations and increased guarantee set to expire under the Recovery Act.

According to the senators, the Recovery Act provided $375 million to increase the guarantee on small business loans and eliminate the fees charged to borrowers. This funding supported $16.5 billion in lending to more than 40,000 small businesses, with borrowers reporting that these loans would save or create more than 450,000 jobs. Unfortunately, say the bill’s designers, this money is almost completely spent and the SBA has been forced to create a waiting list for awarding the final dollars. Since the creation of this waiting list, the weekly SBA loan volume has plummeted far below its pre-Recovery Act volume. Before the Recovery Act, the average weekly loan volume for SBA loans was $114 million. Following implementation of the Recovery Act provisions, the weekly volume increased to $213 million. But in the first full week of lending following the establishment of this waiting list, only $71 million in loans were approved.

Specifically, the “Small Business Job Creation and Access to Capital Act of 2009” would:

• Increase the loan limit on 7(a) loans from $2 million to $5 million;

• Increase the loan limit on 504 loans from $1.5 million to $5.5 million;

• Increase the loan limit on microloans from $35,000 to $50,000 and increase the maximum loan made to a microloan intermediary from $3.5million to $5 million;

• Allow the 504 loan program to refinance short-term commercial realestate debt into, long-term, fixed rate loans;

• Extend the authorization to provide 90 percent guarantees on 7(a) loans and fee elimination for borrowers on 7(a) and 504 loans through December 31, 2010; and

• Direct the SBA to create a website where small businesses can identify lenders in their communities.

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