Next month two budget-neutral economic recovery programs for small businesses will expire unless Congress ends its election-year deadlock and extends them. The refinance provision of the U.S. Small Business Administration (SBA) 504 loan program and the First Mortgage Lien Pooling (FMLP) program have provided a needed financial lifeline for small businesses over the past 18 months, but they face the budget ax if not extended.
SBA loan volumes increased in late 2011 and 2012 due in large part to these programs. SBA 504 refinances accounted for 14.7 percent of all SBA 504 loans made in the first quarter of 2012, and 20.6 percent of total SBA 504 dollars during that time period. Nearly 15 percent of all SBA 504 loans made today are FMLP loans.
In an effort to save these two budget-neutral SBA lending programs, I launched an online petition asking the U.S. House of Representatives Committee on Small Business and U.S. Senate Small Business Entrepreneurship Committee leaders to extend the two programs by one year each.
Availability of capital is still the biggest obstacle facing small business owners in the U.S. today. Despite record-low commercial loan interest rates and easier access to lending capital for major banks, heavy regulatory pressure has limited traditional lenders from approving more small business loans.
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