SBA Sees Improved Business Outlook

Improved Business Outlook

LAS VEGAS--(BUSINESS WIRE)--One hundred days after President Obama signed the American Recovery and Reinvestment Act (ARRA) into law on February 17, 2009, the U.S. Small Business Administration is seeing signs of improved small business lending.

Nationally, loan volume has increased more than 25 percent compared to the weeks just prior to passage of the ARRA legislation. As of May 29, SBA had approved $3.15 billion in Recovery loans, and supported nearly $4.3 billion in lending to small businesses. Also, from February 17 to May 15, 423 lenders that had not made a loan since October 2008 made 7(a) working capital loans. Of those, 188 had not made a loan since at least 2007.

In Nevada, the economic recovery being experienced in many other parts of the country has remained just over the horizon. “We remain hopeful Nevada’s economic recovery will be evident soon,” says John Scott, SBA’s Nevada District Director. “Experts say our unemployment and real estate indicators should start to improve in the coming months. That would signal the recovery is beginning to take hold here in Nevada.”

On March 16, SBA implemented temporary fee elimination for borrowers on its 7(a) loans and for both borrowers and lenders on its 504 loans. The agency also increased loan guarantee levels up to 90 percent for 7(a) loans. The two loans are the agency’s largest loan programs.

One Nevada-based company taking full advantage of this new development is Tectonics Design Group in Reno, a civil and industrial engineering and design company. The federal economic stimulus package reduced origination fees for the SBA 504 program by nearly two percent of the loan amount, saving the company nearly $6,500 in fees. “It sweetened the deal and gave us confidence,” says company president Jeffrey Turnipseed. “And it allows us to keep some cash reserves in place to ride out these rough times.”

Beginning June 15, SBA’s new ARC (America’s Recovery Capital) program will provide loans of up to $35,000 to viable, but struggling small businesses to help them make debt payments. The no-interest, deferred repayment loan will provide a “bridge” for many small businesses through these tough economic times.

SBA Administrator Karen Mills is confident the tide is turning. “At SBA, we are using all the tools in our toolbox to help small businesses lead our nation’s economic recovery,” she said. “Small businesses are getting the dollars they need, not only to keep the doors open and employees working, but also to grow and create jobs.”

Interested parties can get current information on SBA’s Recovery efforts and program updates through www.sba.gov/recovery.