WASHINGTON, D.C. — The president signed a bill last week that will increase the lending authority of the Small Business Administration by more than $3 billion.
The measure in part concerns SBA’s flagship 7(a) loan program and amounts to a 30 percent increase in loan funds for the current year.
It allows SBA to lift a three-month-old cap of $750,000 on 7(a) loans and to drop restrictions on piggyback loans.
According to Hector V. Barreto, the SBA administrator, the new measure will allow his agency and small businesses “the opportunity to get down to the business of financing growth and creating jobs for the U.S. economy.”
“I believe we can expect another record-breaking year for the SBA’s flagship 7(a) loan program, and another historic year for America’s small businesses.”
The new law increases the program’s lending authority for this year to $12.5 billion, allowing it to reach up to 90,000 small businesses in fiscal 2004, potentially creating or retaining up to 500,000 jobs.
The removal of the $750,000 cap in the 7(a) program returns it to its previous $2 million level.
The measure also raises the maximum on SBA Express loans to $2 million and allows the SBA to raise the maximum guaranty on loans of that size to 75 percent. As in the 7(a) program, piggybacking again will be permissible.
SBA said the legislation reauthorizes the 504 loan program and sets authorization levels for the SBA Investment Co. program through the end of the fiscal year.
Finally, the bill also guarantees that SBA’s Small Disadvantaged Business and Preferred Surety Bond programs will remain in continued service through June.