$40 Million Sba loan Extension

The American Recovery and Reinvestment Act of 2009, (ARRA) often referred to as the Stimulus or The Recovery Act, is an economic stimulus package enacted by Congress in February 2009. The Act followed other economic recovery legislation passed in the last year of the Bush administration.The ARRA was intended to promote investment and consumer spending during the recession and create jobs. The reasoning for the stimulus comes out of the Keynesian economic thought that argues that government spending should be used to cover the output gap created by the drop in consumer spending during a recession. While many economists agreed a stimulus was needed under these conditions, others maintained that fiscal policy would not work because government debt would use up savings that would otherwise go to investments, what economists call crowding out. The Act includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education, health care, and infrastructure, including the energy sector. At the end of August 2009, 19 percent of the stimulus had been outlaid or gone to American taxpayers or small businesses to provide small business help in the form of tax reductions. Currently, the U.S. Small Business Administration continues to waive loan fees and offer higher guarantee levels on its popular small business loans under an extension of a program launched last year under the American Recovery and Reinvestment Act.The 7(a) Loan Program is the SBA's primary program to help start-up businesses and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The name comes from section 7(a) of the Small Business Act, which authorizes the SBA to provide small business loans to Americans. The SBA itself does not make loans, but rather guarantees a portion of loans made and administered by commercial lending institutions.Under the act, the SBA received $730 million to provide small business help including $375 million to boost the guarantee on its 7(a) loans to 90 percent, and to waive fees charged to borrowers.Funding for the program has repeatedly been exhausted, and then extended. The SBA said the incentives have led to an increase in lending to start-up businesses. The new $40 million extension runs through April, or until the funds are spent. While this does not guarantee that all small business companies who apply for a 7 (a) loan will receive it, the SBA is extending funding to make more financing available to businesses that qualify for the program.For more information on the 7 (a) loan eligibility requirements please follow the link below: http://www.sba.gov/financialassistance/borrowers/guaranteed/7alp/FINANCIAL_GLP_7A_ELIGIBILITY.html