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November 23, 2009
Because 7(a) loan application volume at the end of last week greatly exceeded projections, effective today (November 23, 2009) SBA has implemented the Recovery Act transition procedures that it described in Procedural Notice 5000-1131, Transition Period for Initiatives under Sections 501 and 502 of the Recovery Act. This means that as applications currently in SBA's processing centers are approved, and as new applications are received, they will be placed in a queue and will be eligible for funding under the Recovery Act provisions only as other approved Recovery Act loans are cancelled. Therefore to assure that as many small businesses as possible receive Recovery Act initiative benefits, NAGGL urges all 7(a) lenders holding approved Recovery Act loans that will never be disbursed to cancel those loans. Remember, however, that once a loan is cancelled, it cannot be reinstated as a Recovery Act loan unless funds are available when the reinstatement is requested. The same condition holds true for increases to existing Recovery Act loans.
SBA has created a special Website - www.sba.gov/recoveryq - that will provide information for lenders on the status of the Daily Transition Phase Alert, and will allow lenders to track where their individual loans stand in the approval queue. This site is now fully operational. On a scale of green ('funding likelihood high') to red ('funding likelihood low'), the 'Daily Transition Phase Alert rates today's 7(a) Recovery Act loan funding as yellow meaning that the likelihood of Recovery Act funding is 'moderate.' Remember, too, that, as described in the Notice, a lender may get immediate funding for a loan by stating that it wishes the loan to be funded as a non-Recovery Act loan, meaning that it will be subject to the normal guaranty fee, and that the lender will receive the standard 85/75% guaranty based on the size of the loan.
Finally, NAGGL reminds you that the Congress is currently considering legislation that would provide additional funding to allow extension of the Recovery Act initiatives. We urge you to contact your Senators and Representatives to let them know how critically important the passage of this legislation is for the continued recovery of America's small businesses.
 NAGGL, President & CEO
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NAGGL
215 East 9th Avenue
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