The money needed to help individuals buy small businesses or to enable small business owners to expand their companies is becoming more available after the severe credit freeze that impacted the economy during the end of 2008 and the first part 2009. The SBA announced that loans to businesses totaled $1.9 billion in September, the highest monthly sum since August 2007.
In a press release dated October 1, the agency credited the American Relief and Recovery Act with changes that have encouraged lenders to reenter the market with loans needed by small businesses. Included in the changes are suspension of loan fees and more extensive guarantees, up to 90% of the loan amount, provided by the SBA to approved lenders.
“The Recovery Act was critical to unlocking the market and as a result we’ve helped put billions of dollars of much needed capital in the hands of small business owners during this tough economic time,” according to SBA Administrator Karen Mills. She said the government’s efforts to unlock credit markets have “brought more than 1,200 lenders back into SBA’s loan programs.”
The agency acknowledged that loan activity ground to a halt following the economic meltdown accruing in the wake of the Lehman Brothers bankruptcy filing in September last year. The stimulus bill was passed in February of this year and since then the number of lenders willing to provide SBA-backed loans continues to grow.
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