What’s New With SBA Loan Programs

Two very positive things have happened in the past year that have greatly enhanced the SBA’s two well known small business loan guarantee programs. The first was the introduction of The Term Asset-Backed Securities Loan Facility known as TALF. TALF was the Federal Reserve’s response to the terrible disruption in the capital markets that began roughly a year ago with the bankruptcy of Lehman Brothers. TALF is designed to increase credit availability and support economic activity by facilitating renewed issuance of small business loans and other types of credit as well. A principal beneficiary of TALF is the SBA and its loan guarantee programs.

The second positive aspect surrounding SBA was the appointment in December 2008 of Karen Gordon Mills to be the SBA’s Administrator. Ms. Mills is not your garden variety government bureaucrat. Indeed, Karen Mills joins the SBA after almost 16 years as a founding partner of MMP Group, a successful private equity firm. She is focused on small business expansion.

Just as a reminder, SBA has two popular loan guarantee programs for small business. The first program is called 7a and is used for lines of credit and term loans for equipment, working capital, etc. The second program is called 504 is used for the financing of real estate such as a new factory or office building. Both programs require in depth business plans.

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