If you're interested in going into business for yourself, starting your own company or investing in a franchise, there is excellent news on the lending front. The Small Business Lending Fund Act -- HR 5297 -- is currently being considered by the Senate. The bill could mean some great things for current and potential entrepreneurs.
This bill, if passed, would increase the maximum amount of both SBA 7(a) and 504 Loans, allow for borrowers with balloons coming due to refinance, and would re-up the guaranty to 90% for 7(a) Loans. Details of the bill are outlined in the SBA 504 Blog, which organizes the potential changes to the loans as well as outlines the benefits the bill could reap.
The International Franchise Association is supporting an amendment to the Act which would increase the maximum loan amounts for the SBA 7(a) program to $5 million and for the 504 program to $5.5 million.
From the SBA website:
The 7(a) Loan Program is SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels.
The 504 Program provides small businesses requiring “brick and mortar” financing with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.
Currently maximum 7(a) Loan Program amount is $2 million, and maximum 504 Program amount is $1.5 million for job creation, $2 million for public policy goal and $4 million for small manufacturers.
For more information on SBA Loans, check out the SBA website here.
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