The 2009 Stimulus Plan allocated approximately $375 million to the SBA for higher loan guarantees to lenders, and waived borrowers’ fees. The initial funding was consumed before the year’s end. A number of weeks elapsed, and a second infusion was made of approximately $150 million. That too expired shortly.Since then, on March 2, 2010, President Obama signed the Temporary Extension Act of 2010 for another $60 million infusion to the SBA. This last infusion has a known termination date of March 28, 2010. The SBA has not announced what will happen beyond that date.

The effect of the higher guarantees is an increase in the amount of loans made. Banks that would not have loaned money are lending. Banks that would lend smaller amounts are increasing the size of loans. This is not to say that every lender is maximizing either the number of loans or the size of loans. However, it is clear that the program is working and having a positive impact.

The frustration is created from the intermittent support the SBA is receiving. All lenders and most business people thrive on some degree of predictability. Some amount of consistency in the economic climate needs to exist in order for American small business to flourish again.

Recently, the benefit of small business employment numbers has been widely discussed in the media, and there is consensus that small business is an economic engine with a far reaching positive employment history. Unfortunately, SBA funding and the benefits that can be extended to borrowers lack consistency. It would be beneficial if the SBA could be funded sufficiently over a longer period of time to eliminate these repeated changes in lending terms. The program is working and should be allowed to operate on a more consistent basis.

David Hitchcock is the Owner / Broker of MortgageCerv Financial whom of which specializes in owner occupied commercial property& commercial business funding.If you feel we could be of service to you,please give us a call at 888-282-0601