The U.S. Small Business Administration (SBA) has temporarily expanded its 7(a) loan program, giving great access to much-needed capital for small businesses across the country.
“We have seen signs that small businesses that are just outside the traditional 7(a) size standard are being shut out of the conventional lending market,” SBA Administrator Karen Mills said. “This temporary change will help those businesses weather these tough times and help move our nation closer to economic recovery.”
SBA’s alternate size standard for its 7(a) loan program will be in effect through Sept. 30, 2010. As a result of the temporary change, more than 70,000 additional small businesses – including auto and RV dealerships, auto industry suppliers and others – could be eligible to apply for SBA 7(a) loans.
The temporary 7(a) loan size standard will parallel the standard for the agency’s 504 Certified Development Company loan, and will allow businesses to qualify based on net worth and average income. The net worth for the company and its affiliates can’t be in excess of $8.5 million and average net income after federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years can’t be more than $3 million.
For more information about SBA’s revisions to its small business size standards, visit sba.gov/size/indexwhatsnew.html and click on “What’s New about Small Business Size Standards.”