The Small Business Jobs Act of 2010 (H.R. 5297) passed in September 2010 has starting influencing the small-business lending trend this year. The new law has provided approximately $30 billion to small banks. This means that tax break of approximately $12 billion is extended to small businesses and simultaneously also expands the SBA loan limitations.
Loan opportunities have been enhanced for women-owned businesses. Credit to small businesses that did not qualify previously may now be possible. In the first week itself, the agency granted 2,000 loans totaling nearly $1 billion. Small businesses will also be provided more federal dollars due to grants provided to community banks and State funding programs. The Small Business Development Centers received $50 million in grants so as to fund counseling and training.
A zoom in trends that this new law may influence in 2011 are as follows:
- Credit demand of businesses will increase and SBA dollar volume will also rise steeply. Executives who attended the annual conference of SBA lenders predict that the volume of loans will double in 2011. Investments as well as money borrowing will increase. Lending capacity of banks will also rise as SBA risk enhancements such as guaranteed loans are made available to all.
- Energy saving solar panels shall also be incorporated onto businesses and hence improvements can be seen in businesses. Specialized programs in-order to bring improvements in SBA loans is also ensured by some banks. This program caters not just too large businesses but small ones as well. Businesses will get the scope to save on energy by using the solar power.
- Under the new law, SBA 504 loans can be used to refinance real estate loans. Small business can now finance real estate as SBA has increased the loan amount to $5 million and has also waived fees for borrowers and banks.
- Incentives are offered under the new law to small businesses. It guarantees loan up-to $350,000 and enables small businesses to export their products.
- Small businesses ability to compete for federal contracts also gets strengthened under the new law. Certified women-owned businesses can compete for federal and state government contracts.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to