New Small Business Administration lending program to begin February 28 with large limitations

The SBA has released the rules for a New financing program. The program is intended to offer help to companies facing foreclosure of their buildings. The limitations on the loans, however, are cutting out most companies that could benefit.

Financing program for SBA is New

This year, in Jan, businesses have been waiting for lending program rules. This can only come from the Small business administration. The rules have been something the SBA has worked on since 2010 when the program passed in Congress. On Thursday, Feb. 24, the rules were officially announced. Underwater mortgages could be covered by the loans that businesses with mortgages can get. These will be due in the next 24 months. However, the owner of the business could be required to put 10 percent of the loan amount on the line in money or equity of another property.

Concerns about limitations of SBA program

The Small Business Administration lending program is intended to help businesses on the brink of foreclosure. It wouldn't really work though with all the rules set up that might end up cutting lots of companies out. Any businesses that do not have the down payment cash accessible, that cannot pay the extra 1 percent fee or that already have short-term Small Business Administration mortgage loans are not allowed to get the loans. Probably the most help can be going to companies that are close to shutting down however may still work with the rules, the SBA states.

Getting a small company loan started

Keeping smaller businesses open is a very hard thing to do. This is because it’s hard to get a payday advance to the companies as they’re typically too small. Businesses aren't all going to work out either. Sometimes they are just bad and fail miserably. Sorting out which companies in Irving, TX or Anywhere, USA, have a chance of succeeding is the first challenge. Ensuring the government doesn’t loan $15 billion to businesses that can’t repay it is also tough. Hopefully, businesses that need help and will work can get the help with the SBA program.

Citations

LA Times

articles.latimes.com/2011/feb/18/business/la-fi-sba-loans-20110218