On October 21, 2009, President Obama announced new steps that the administration is taking to help expand access to capital for small businesses.  Senate Bill 1832 was immediately introduced by Senator Mary Landrieu to implement the Administration's initiatives.  Highlights of the proposed legislation include:

• permanently increasing the maximum 7(a) loan size to $5 million
• permanently increasing the maximum 504 sizes to $5 million (non-mfg.) and $5.5 million (mfg.)
• increasing the maximum guarantee dollars to one applicant (and affiliates) to $4.5 million
• extending the increased 90% maximum 7(a) guarantee percentage through 10/1/2010
• extending ARC Loan relief to existing SBA loans
• permanently increasing the maximum Microloan loan size from $35,000 to $50,000

If enacted in its current form, the proposed legislation aims to stimulate lending in the SBA program by extending the popular 90% guarantee for lenders, by increasing the number of projects that can be financed through the increased maximum loan amounts, and by making additional SBA guaranty dollars available to existing SBA borrowers that had maxed-out their SBA guarantee dollar allocations.
 
In addition to the proposed legislation, the SBA is also proposing an increase to the existing SBA size standards that will coordinate with the increased loan amounts pending in Congress.  This is the first comprehensive review of the SBA's size standards in more than 25 years.  The SBA press release regarding the new size standards can be found here.
 
For more information regarding the pending SBA program changes, contact the author at esmith@starfieldsmith.com or 215-542-7070.