SBA Lending Offers Great Incentives for Businesses

Written by admin   // December 2, 2010   // 0 Comments

Expert says now’s the time for those looking to borrow or refinance debt

If you’re a small business owner, now’s the time to consider a small business loan.

With the recent signing of the Small Business Jobs Act, small businesses are eligible for some new benefits. But, many of the new changes are ending shortly, which is why small businesses need to act now.

“Many people don’t realize that the term ‘small business’ goes above and beyond one or two employee firms,” said Thomas Zernick, vice president and head of the Small Business Administration (SBA) lending program in Wisconsin for Citizens Bank.

“Many of the businesses in our communities and state are small businesses so, in order for our local and ultimately our national economy to recover, this act was signed. These new provisions will provide the critical resources small businesses need to drive economic recovery and create jobs.”

Zernick says the main highlights of the bill allow small businesses to:

  • Refinance debt under the SBA 504 program (previously, this program was only used to finance the purchase of new equipment or real estate)
  • Be eligible for loans of up to $5 million (the maximum loan size prior to the bill was $2 million)

Have lower loan costs by being eligible for a 90 percent loan guarantee and fees waived until provisions are depleted or through December 31, 2010

Be eligible for a loan up to $1 million through the SBA Express program (typically used for working capital lines of credit)

One additional advantage of the new bill is that the size standards for eligible businesses to take advantage of the SBA program permanently increases.

“Under the new bill, businesses are now eligible if they make less than $5 million in net income after tax, averaged over the last two years and their tangible net worth in their balance sheet is less than $15 million,” Zernick said.

“Not only have the changes allowed more businesses to be eligible for SBA loans, they have provided access to more capital. For small businesses, not having to pay the SBA fees could mean saving thousands of dollars which can then be put back into the company.”

Zernick says despite all the incentives that are available for borrowers, many are still under the misconception that banks aren’t lending. “This is simply not the case,” he said.

“Banks obviously want to be assured they’re lending to financially sound businesses, so you’ll still have to be qualified for a loan, but fortunately, when you work with an SBA-preferred lender, it can be a smooth and easy process. Loan approvals can be even obtained on the same day when you work with an SBA-preferred lender.”

For business owners looking to establish lines of credit, now is the time to meet with a local SBA preferred lender.

“There is a sense of urgency as the December 31 deadline is right around the corner and the 90 percent loan guarantee and waived fees could end earlier than the last day of the year if funds are depleted prior to that date,” said Zernick.

“Small businesses should meet with a local SBA preferred lender as soon as they are able if they want to take advantage of these new provisions, which are better than we may ever see again.”

For more information about SBA loans visit or stop in at your local Citizens Bank branch.

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